| For the 30 years of China's reform and opening up, the market economy continues to develop and perfect, various economic sectors flourish and a number of individual workshops have accumulated their capitals. Meanwhile small-sized limited companies come into being in order to expand and adapt to the development of company law. However, in practice there are a lot of "family companies" where corporate governance structure is imperfect and corporate property and family property are not distinguished clearly as well. The shareholders shall be identified as duty embezzlement crime according to the existing criminal law if they take larger amount of corporate property as their own illegally with the facilitation of their position. However, due to the complex facts in cases it is biased to identify all as duty embezzlement crime. It has some hint of an objective blame. This paper beginning from a specific case related to duty embezzlement crime, focuses on the duty embezzlement crime in "family company". There are four parts in the paper to study the problem:Part I: Introduction to the case. Beijing Tongzhou district court heard the case of Li Shuang's duty embezzlement in 2003. The case is following: Sun Xu, Li Shuang's husband, is chairman of the board and general manager in Beijing Tian-Xu Industrial Group and Beijing Tian Xu-da Real Estate Development Co. Ltd. Sun Xu is a substantial shareholder in the two companies, and his daughter, Sun Yue and his son-in-law, Guan Jian are minority shareholders. Li Shuang took corporate property with the amount up to RMB 280 thousand yuan as her own with the facilitation of her position. The court judged her act as duty embezzlement crime, but punished her more leniently considering the nature of family companies.Part II: The focus of controversy and differences over the case. 1. The focus of controversy over the case. It is how to identify the nature of the property of"one-man company", and whether the wife of one-man company's shareholder becomes the subject of duty embezzlement crime. 2. Differences over the case. There are three different views of such cases in academic and practical fields. The first view is that Li Shuang's act constitutes duty embezzlement crime. The second one is that Li Shuang commits duty embezzlement crime but should be exempted from criminal punishment. The third one is that Li Shuang does not commit a crime. 3. This paper supports the third view that Li Shuang does not commit a crime. First of all, Li Shuang's act does not have the objective element of taking corporate property as one's own illegally, required to constitute duty embezzlement crime that is taken. Secondly, Li Shuang's act does not have a subjective element of direct intention and with the purpose of illegal possession of corporate property, required to constitute duty embezzlement crime.Part III: Legal issues related to the case. 1. The rules for the establishment of limited company and the system of denying its corporate personality. The conclusion is: the system of denying corporate personality shall be applied when the property of individual company or family company blends with family property. 2. The identification of duty embezzlement crime. The paper from the legislative process of duty embezzlement crime conducts a detailed analysis of the case based on the two-element theory constituting a crime. In terms of the objective element, the paper focuses on the possibility of various subjects committing duty embezzlement crime, and conducts in-depth analysis of"taking advantage of position facilitation"and"taking corporate property as one's own illegally", etc. In terms of subjective element, the paper elaborates the specific content of direct intention and purpose of illegal possession both required in duty embezzlement crime, and makes an analysis from the level of possibilities of illegality knowledge and expectation with the facts of the case.Part IV: Findings. The paper makes 5 findings as follows. 1. In limited company with sound corporate governance structure, its staff shall be recognized as duty embezzlement crime if they illegally take corporate property with larger amount as their own with the facilitation of their positions. 2. In the family limited company with relatively more perfect corporate governance structure, its member shall be recognized as duty embezzlement crime if they illegally take corporate property with larger amount as their own with the facilitation of their positions, no matter they are shareholders or non-shareholders, the common members or shareholder's relatives. 3. In the family limited company with chaotic corporate governance structure, that is, registered as a limited company (two or more shareholders), it acts as a real one- person company in the name of an ordinary limited company for all its small shareholders other than major shareholders are just nominal shareholders, the lineal relatives of the major shareholders generally are not recognized to commit duty embezzlement crime, while its general employees shall be recognized as duty embezzlement crime. 4. In the couple company with chaotic corporate governance structure, if one spouse illegally takes corporate property with larger amount as their own with the facilitation of his or her position shall not be recognized as duty embezzlement crime but may recognized as embezzlement crime. 5. The paper discusses whether one of the spouses should be recognized as crime if he or she occupies property in the individual industrial or commercial households.Finally, I believe that the case is typical though it is small. Based on it I put forward two attention worthy and thought-provoking questions in order to get instructions from jurists and legal practitioners. |
