Research On The System Of Corporate Charter Invalidity

Companies, as the most important formula in modern society, hold most fortune around the world and have great effect on the society. Corporate charter is a essential autonomy rule which formulated by all the sponsors and records company name,purpose,scope of business,organization ways of investment,allocation of rights and obligations and so on. So the significance of the corporate charter is great. The Corporation Law of the Peoples Republic of China gives companies more freedom about the corporate charter than before. But the corporation law has not set down the corporate charter invalidity system, so that if corporate charter is invalid in practice and so on, we can not solve it. So we should study the corporate charter invalidity system to consummate the system of the corporate charter.Invalidity of the corporate charter is the corporate charter which has been examined and registered by the administration can not produce the expected effect because the corporate charter breaks the mandatory rules of the corporation law,damages the interests of shareholders, public or creditors. The Civil Law system and the Common Law system have made different provision about the corporate charter invalidity system which we can learn. The corporate charter invalid system has great significance which could motivate company's development and preserve the social order.I analyze the corporate charter invalid system from three aspects. The first is who have right to hold and identify the corporate charter is invalid. Shareholders,directors or the board,supervisors (council),senior administrators,some bodies from outside of the company and some state administrations could hold the corporate charter invalid, and some state administrations,the court and the arbitration agency can identify the corporate charter invalid. The second is the standard of presuming the corporate charter invalidity. By analyzing the rules of corporation law, when the corporate charter break the mandatory rules of corporation law or damages the interests of shareholders and the public, the corporate charter is invalid. The last is the procedure of identifying the corporate charter is invalid. The procedure includes administrative procedure and judicial procedure. The corporation registering department could examine and identify the invalidity of corporate charter. For listed companies, China Securities Regulatory Commission could examine and identify the invalidity of listed companies'charter. If someone disagrees the decision which decided by the corporation registering department or China Securities Regulatory Commission, he can raise administrative review or administrative litigation. Also, shareholders,directors or the board,supervisors (council),senior administrators,some bodies from outside of the company also could submit a case to the court. The court should make judgment. According to the arbitration agreement which reached by all the shareholders, arbitration agency could arbitrate about the validity of the corporate charter.Invalidity of the corporate charter will bring out lots of legal consequences. The invalidity of the whole corporate charter will make the company establishment invalid. The invalidity of the clauses of the corporate charter will make the corporate charter modified. The decision which made according to the invalid corporate charter is also invalid. Invalidity of the corporate charter also will lead to legal responsibilities.