The Research On Legal System Of Company Reinvestment

Company reinvestment, as a fundamental means for capital operation and profit maximization, on one hand, is good for enlarging the corporation scale, enhancing the anti-risk ability and improving the market competitiveness, on the other hand, it would give rise to many potential risks which may infringe the interests of the minor shareholders and creditors. With the cancelation of amount restriction in reinvestment and broadening of reinvestment object by the new Company Law in 2005, company reinvestment is more free and population than even before. The phenomenon of infringing minor shareholders, by controlling target company, is becoming more and more serious. There some measures should be taken to protect the interests of minor shareholders, such as strengthen controlling shareholder and director's fiduciary duty in target company and establish the model of accountability, improve and refine the disclosure information system in related transactions to preserve the shareholder's right of know; perfect shareholder litigation system to make it practical . For dealing the problem of reinvestment company damages the interests of creditors by abuse its shareholder status, the effect of disregard of corporate personality system should be enhanced by demand defendant company to prove its personality independent, and the deep-rock doctrine should be introduced for protecting the interests of creditors when target company goes into bankruptcy. In addition, when the company should take the limited liability for reinvestment, the reinvestment project should be decided by the company's board of directors. Conversely, it should be decided by absolute majority stockholder in majority stockholders' meeting. When the object of reinvestment is be forbidden by law, the reinvestment decision should be identified as invalid and it should be identified as valid only when the decided subject or procedure is against the law for the interests of third parties. But the person who decides the reinvestment project should be accounted for the legal responsibility. Investment companies in violation of the provisions of the resolution to invest only in investment to the law can be, just turn the main investment decision-making and procedural law, it should be recognized as valid in order to protect the interests of third parties, but responsible should be held accountable for the legal responsibility.