Collateral Funded A Number Of Legal Issues To Explore

There is much confusion among the theorists that if mortgage can be used as the subject matter of capital contribution. Though it extends the scopes of shareholder's capital contribution in China's new "Company Law" ,it does not admit or deny the way of capital contribution using mortgage. In theory, capital contribution is valuable. It can make mortgage full used and commercial efficiently. In the meanwhile , in practice, more and more investors attach weight to capital contribution of mortgage and practices it. On one side, capital contribution of mortgage has the same functions just as the other physical capital contribution and meets the capital priciples of Company Law. On the other side, capital contribution of mortgage funded must be restristed for there are many limitations on collateral. So, when the system of collateral be designed, we must coordinate the priciple of efficiency, justice and safety and define the scope of mortgage that can be contributed. In the meanwhile, we should better the system of assessment and system of registration and strengthen the legal responsibility of shareholders. In these ways, the functions of capital contribution of mortgage can be achieved.