On The Attribution Of Transaction Responsibility Before The Establishment Of The Company

As a transitional organization before the establishment of the company, thepre-incorporation company is an essential organization which cannot avoid havinglegal relationships with other legal subjects, in the various modern society. It hasregulated that complete-established company should be responsible for the behaviorsand take the relative consequences for pre-incorporation company, according to theSupreme People’s Court on application of Provisions Three of Company Law of thePeople’s Republic of China. There is no doubt that some unreasonable points exist inthese provisions. As far as the author concerned, the author will put an emphasis onthe discussion of obligation and responsibility of transaction of pre-incorporationcompany before setting up the company from the perspective of Three Principle ofCapital. There are totally four sections except Introduction and Conclusion, asfollows:The first section is a discussion about who should bear liabilities for thetransaction before the establishment of national and foreign pre-incorporationscompany. After comparing the differences and similarities among legal and practicalprofessions between Germany, American and our country, this part try to find outdrawbacks of each method, which can lay a foundation for author’s research.The second section summarizes the transaction before the company established.This part clearly analyzes the property of setting up a company, which shows one waythat can help the initiator to gain the contract for prompting the company registers as alegal person. Our national law offers capacities of rights and conducts for thepre-incorporation to analyze its internal relationship and external relationship when ithas legal relationship with third party. It is a direct way for the pre-incorporationcompany to present the situation of the pre-trade before the company set up. Thetransaction before the company is founded which is divided into two parts: essentialtransaction which consists of set-up subsidiary behavior and preparation of openingbehavior and unessential transaction. There is no need to take the responsibility ofessential transaction and unessential transaction, making pre-preparation of sharingresponsibility for the thirdly section.The third section is author’s comprehension about who should bearresponsibilities before the establishment of the company. At the first, the authordiscusses problems about the power of the agreement that the initiator sign with the third party on the behalf of his own, the pre-incorporation company and theestablishing company. In addition, basing on the Three Principle of Capital, theauthor’s understanding about these problems can provide some ideas about how tosolve relative practical problems.