Personal Credit And Corporate Control Rights

The control right of limited company has been the focus of theoretical studies, and separate shareholders' controlling the companies usually happen in various kind of market environments. This paper focuses on the condition in which separate shareholders with personal credit can control the company by the methods of case study and theoretical model experienced evidence, also the experienced evidences and logical reasoning.First, there is a systematical, historic review of the researches of this issue starting from agency theory, which focuses on the literatures on how individual credit effects companies' profits and the control right. Then the writer points that this theory need improve.Second, there is the detailed introduction of the process of creation, enlargement, crisis of Liu Hongsheng's company. The writer believe that individual credit effects significantly towards Liu' control of the company in the process of the company's creation, enlargement until crisis; also the writer clearly states the condition under which the control right move to individual credit supplier by case studies.In the end, on the basis on the precedors' research results, the writer sets up the theoretical model, explains the internal mechanism how individual credit control a company, then draw a general conclusion that in the condition of shortage of enterprise capital, the control right will not move if the demand is less than the maximum supply, the vice versa.