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Regulations For Affiliated Enterprises In Corporation Law

Posted on:2011-09-11Degree:MasterType:Thesis
Country:ChinaCandidate:T Y WangFull Text:PDF
GTID:2166360305457464Subject:Civil and Commercial Law
Abstract/Summary:PDF Full Text Request
Affiliated enterprises turn up as a result of the developing economic life, because this kind of enterprise allies can reduce business cost, strengthen the ability of competition, pursue the maximum profits. Though affiliated enterprises have bringed economic benefit, it also causes a serious interest conflict, reflected in corporation law, dominant enterprises in the target of its self-interest, always encroach the subordinate enterprise's interest. As a result, interest of minority shareholders and the creditors are encroached. Then how to adjust the benefit conflict with law forms and to provide protection to minority shareholders and creditors, is an important study in the law of corporation. The main body of this article is carried out in the view of corporation law, we expect that company law especially our country's can make active response to issues brought by affiliated enterprises, balance the interest conflict of relevance entities, and finally lead the development of affiliated enterprises in a right direction.Part I the whole content is about the affiliated enterprises'definition in corporation law, and it divides in three topics: definition, identify rules and the essential character. The article firstly setting affiliated enterprises as some enterprises with controls relation or this possibility, by using other corporation laws for reference. It also distinguishes two close definition. The second part is identify rules, including external and essential rules. External rules mean affiliated enterprises must have at least three enterprises, which are independent in law and with control relation.Essential rules mean this control relation must be to some extent so that the independent of company is in danger. The article continues describing essential characters in third part. The basic of corporation law system is company's legal entity. In traditional corporations, the structure of authority and corporate interest can balance inherent conflict between company and shareholders. But affiliated enterprises broken the system, independent of company have been badly attacked, its essential characters is the fiercely conflict between independent and being controlled.Part II this part is about regulations in building up a affiliated enterprises. Reasons to form such enterprises can be analysed in economic and law visions: Reduce business cost, strengthen the ability of competition and avoid risk or regulations. In corporation law, it is about control of companies. Affiliated enterprises can be formed by investing, contract or other measures. Disadvantage of investment is that it causes cross-hold problems. The regulations to this is including two modes, one is absolutely prohibition, the other is just limitation to rights of relevant shares. The last topic is information disclosure of affiliated relations, and actually the content is Germany laws. Part III this part discussed the regulations after building a affiliated enterprises. The main problem is illegitimate assets transfer in affiliated enterprises, it cost the loss of company benefits, and in the end encroach interest of creditors and stockholders. Illegitimate assets transfer is showing out in related party transaction or excessively controlling deals. Illegitimate related party transaction happens time by time, causes direct assets transfer between affiliated enterprises. Corporation law regulates it in two ways, initially pointing to the loss of subordinate enterprises,and then independent of company entity. About loss of subordinate enterprises, this article shows two measures, Fiduciary duties in common law system and compensarion rule in Germany law. When the independent of subordinate company is destroyed by excessively controlling, use principal of piercing the corporate Veil. The last part is about information disclosure obligation, including reporting system and the right of knowing other information.Part IV the last part of this article enumerate and analyses current legislation to affiliated enterprises in our nation, and give some advices of the author. Regulations of our law is far from a system, and has only weak constraint force. Some articles of corporation law can be applicable for affiliated enterprises. After analysing current development of affiliated enterprises and interest conflict it brings, we think it is necessary to build up a special legislative model adopted to affiliated enterprises, and some core systems within it, including information disclosure, compensation system and also principal of piercing the corporate veil, by all those means, the author hope corporation law may establish a complete protection system of affiliated enterprises.
Keywords/Search Tags:Affiliated Enterprise, Legal Personality, Subordination, Interest Conflict, Regulations of Corporation Law, Information Disclosure
PDF Full Text Request
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