The Civil Liability Of Sponsors

Civil liability of company sponsors is to balance the interests of the intending company, the investors and the third party, especially compensate damage that is infracted by company sponsors。The liability of sponsor includes civil liability, administrative liability and criminal liability。The dissertation only studies the civil liability of sponsors. This paper aims to explore the issue of liability for breach of contract. By comprehensively using induction, confirmation and comparison methodologies, through systematical illustration of the theoretical basis, nature of liability and form of liability in respect of liability for breach of contract, the current legislation on sponsors is reviewed and the thought on construction and improvement of the legal system of China in relation to liability of sponsors for breach of contract is proposed, combining with the theory and legislation with regard to liability of sponsors for breach of contract. This paper is composed in four chapters:Chapter One, Theoretical Analysis of sponsor's Responsibility based on the theory of contract, starts with presenting that the concept of 'sponsor' should be defined in terms of its inherent identity, category, qualification and relevant status within Company Law domain rather than in Ltd area. Then, it explains that the sponsor's civil liability for breach of contract is constructed with two parts: the internal contract liability, liability for subscription under the sponsors Agreement and Articles of Association; and external contract liability, liability for pre-incorporation contract signed for setting up the company with the third party. Lastly, with brief discussion on "Theory of company contract" and "Theory of corporation legal person", it clarifies that the sponsor's liability for breach of contract is not only a kind of legal responsibility under Corporation Law but the contractual responsibility under Contract Law. In other words, it is a kind of combined responsibility.In chapter Two, Analysis of sponsor's Subscription Responsibility, it points out such kind of responsibility refers to the liability for breach of contract not including tort liability. The liability for subscription consists of the liability for breach of contract of the sponsor with inadequate subscription and the capital enrichment responsibility of sponsor with full subscription. In terms of the liability for breach of contract of the sponsor with inadequate subscription, this part illustrate the form of inadequate subscription as well as the liability assumption system of the sponsor with inadequate subscription for other sponsors, companies and creditors. As for the capital enrichment responsibility, it focuses on explaining the theoretical basis, relevant values and forms of liability assumption.In chapter three, Analysis of Pre-incorporation Contract Responsibility for sponsor, with aspects of the main subject of contract signed, time and contract interests' attribution, the Pre-incorporation Contract is defined. Secondly, through the comparison of the Pre-incorporation contract within two legal systems, the system of subject of liability assumption under Pre-incorporation contract signed by sponsors with different names is summarized, which is available for relevant legislation in China for reference.Chapter four, reflection on the contract liability of the sponsor, by comparing and analyzing the sponsors' liability of subscription breach and capital enrichment, points out that sponsors' subscription breach liability should be random rule and granted by the agreement of the parties, under the circumstances that sponsors' subscription liability can effectively guarantee the capital enrichment. On the other hand, this chapter proposes the suggestion to consummate the capital enrichment liability. On the aspect of pre-corporation conduct contract, several points are to be followed: first, the effectiveness of the contract should not be negative no matter what nominal sponsors' adopted to reach the pre-corporation contract. Second, according to various names of sponsors in pre-incorporation contract, it is expected to construct the regulation on subject of liability assumption under pre-incorporation contract in China with reference of "Contract Renewal Theory "of Anglo-American legal system and "Limited Union Theory" of Continental legal system.