The Insight Of The Issue Of The Creditor's Rights Investment In China's Company Law

The issue of creditor's rights investment is relevant to the issue concerning the form of investment, thus it is within the range of corporate capital system. Along with the increasing emphasis upon the nature of property nature of creditor's rights and the tendency of creditor's rights being the investment tool, whether creditor's rights can be the form of investment and thus be involved the corporate capital operation has sparked discussion among various countries' theorists. Under the circumstance of the international competition, the economic rivalry among different countries is not normally confined in the areas of product and market, but more important is the competitions existing in different systems. The capital flows in the international scope. The huge amount of international capital will only flow the place where there are the optimal system, the least restricted regulations concerning the investment and most favorable conditions regarding the quickly-funded establishment of company. Under such historical perspective, countries devoting to the gain an edge in the competition spare no efforts in strengthening the state rivaling power by promoting the practice of raising fund for companies in an efficient way and utilizing the most extensive resources to accelerate the existence of capital in the lowest cost, among which is the enhance of the diversity of captial pattern to both encourage the investment enthusiasm of the shareholders ,to promote to start an undertaking and to increase the public wealth as well. As the new Company Law of the People's Republic of China provide legal access for the creditor's rights investment, a deeper insight into the creditor's rights investment system will have a positive implication upon its legislature and practice. Beginning from the exploration of the basic principle of creditor's rights investment, this article is conducting the research ranging from the adequacy of creditor's rights investment, and the fulfillment procedure of creditor's rights investment, to the liability system of guaranteeing the sufficiency of creditor's rights investment as well as the institutional arrangements by means of the theoretical analysis, legislative comparison with the aim of constructing and improving the legal system of China's creditor's rights investment. The full text is divided into five parts.The first part is directed upon the main analysis of some basic concept related to creditor's rights investment, and the classification of the creditor's rights investment according to different situations and hence the generalization of the characteristics of the creditor's rights investment. Regarding the meaning of the creditor's rights investment, the author adopts a general comprehension to define the creditor's rights investment as follows: the investor invests the company with his creditor's rights to the company or his creditor's rights to the third party. There has been a ceaseless controversy over creditor's rights investment, from either the field of corporation law theorists or the practical realm, because of the fact that the born characteristics of right lead to the uncertainty of fulfillment of the creditor's rights investment. Specifically speaking, the characteristics of right influencing the creditor's rights being investment are characterized as the five following aspects, i.e. the nature of creditor's rights as the request power, the intentional agreement of the content of the creditor's rights, the non-openness of the creditor's rights and the difficulty in assessing the value of the creditor's rights and the creditor's rights vulnerable to deception.The second part focuses upon the main discussion the theoretical foundation of the creditor's rights investment. The author first discusses the transferability of the creditor' s rights and the tendency of the creditor' s rights being the tool. The primary motive of various countries formulating and fostering the system of transferring the creditor's rights is to promote the capitalization of the creditor's rights so as to make it as the investment tool, which is also the prerequisite of the creditor's rights investment. Next comes the study of refreshing the idea of the corporate capital system underlying the creditor's rights investment. For one thing, the regulations on the state of corporate capital is shifted form the compulsory legal principle to the autonomous principle by the shareholder; for another, the value goal of the corporate capital system experienced a return from the priority of the transaction safety to the priority of the capital efficiency; lastly, analysis is laid upon the jurisprudential foundation of the creditor's rights investment. The jurisprudential foundation of the creditor's rights investment varies from situation to situation. The creditor's rights investment in which the company is the debtor is a reference from the principle of debt offset, while the theoretical foundation of the creditor's rights investment in which the third party is the debtor is from the assignment of creditor's rights system of creditor' s rights shift.The third part discusses the adequacy of the creditor's rights investment. On the basis of the reasonable definition of the scope of the creditor's rights investment, the author is trying to find a balance between the principle of capital efficiency and that of the transaction safety. In this section, the emphasis is firstly laid upon the adequacy of illiquid contribution, on the basis of the " four important documents " proposed by the Japanese scholar, elucidating the four requirements that the actual goods investment should meet the condition of certainty, the existence of the goods and the possibility of appraisal and that of transferability. Then, in the light of individuality of the creditor's rights investment, a further discussion is undergone on the adequacy of the creditor's rights investment. The investment of creditor's rights should not only satisfy the adequacy of the actual goods investment, but also the prerequisites of non-right burden and the fulfillment deadline conforming to the stipulation of the payment time limit of the investment in China's Company Law.The fourth part mainly examines the legislative practice, both domestic and overseas, of the creditor's rights investment. Inspected from the overseas legislative practice concerning the creditor's rights investment, the tendency of the modern company law can be described as follows: along with the social and economic development, the type limit of the shareholder' s investment should be released and the creditor' s rights investment should be allowed to fulfill the utilization value of the property under certain circumstances. From the domestic legislative practice of creditor's rights investment in China, the legal rules about the creditor's rights investment in company experienced from the permission to prohibition and the final return of the permission. The 2005 new revised China's Company Law, combining the enumeration with summarization, provides a legal access for the creditor's rights investment.The fifth part elaborates the idea of perfecting legislation rules of China's creditor's rights investment, aiming to ensure the legal function of the creditor's rights investment system can be performed through the establishment of a series of procedural and substantive safeguarding mechanism. In the procedural aspect, the article aims to guarantee the content of the creditor' s rights investment and the authenticity of value and to protect the benefits of the company' s potential creditors and other shareholders by means of setting up the qualification for the creditor's rights investment, stipulating different categories of creditor's rights investment in accordance with different fulfillment procedure, stressing the publicity of the creditor's rights investment; while in the substantive procedure, the smooth fulfillment of the appraisal value of the creditor's rights investment is ensured through the establishment of the liability system for the creditor's rights member, the initiator, the directors of corporations, and the senior executives as well as the appraisal and capital examining organization.