Study Of Legal Issues Of Associated Enterprises

Affiliated companies are now sweeping across the world. With the development of China's reform and open-door policy, groups of enterprises, the typical model of affiliated companies, are not uncommon in China nowadays. Affiliated company, which is defined as the association of several independent companies, is formed in one way or another to achieve certain economic purposes. As one of the most important forms of companies' external expansion, affiliated company is the corollary of socialized production and marketing economy. The emergence of affiliated companies has promoted the rapid expansion of enterprises and helped enterprises enhance their economic capacity and competitiveness. At the same time, it has also brought about some negative consequences, such as impinging on the current legal system. As far as the corporate law is concerned, the emergence of affiliated companies has given rise to various legal problems, such as the virtual increase in companies' capital, impairing the benefits of minority shareholder and creditors in the subordinates, destroying corporate governance, and so on. As for other legal areas, various problems have also come up, for example, insider trade problems in securities law, non-arm's length transaction problems in tax law, and monopoly problems in anti-monopoly law, etc. Many countries in the world have formulated legal systems or legal principles to deal with the above problems. Some even have constituted systematic legal systems to govern affiliated companies. In our country, however, on one hand, we have not constructed any relevant legal systems; on the other hand, we have not got enough experts and scholars specializing in this field. That's why I have this topic as my thesis.This paper first examines and analyzes relevant legal systems in the world, then provides some practical suggestions for the legislation of our country by applying the academic achievements available to the economic practice in China. Following the pattern of presenting problems, analyzing problems and solving problems, this thesis consists of three parts: Partâ… first gives the definition of affiliated companies, then discusses their legal characteristics and forms in terms of connotation and epitaxy. Partâ…¡focuses on the influence of affiliated companies on the current legal system , especially on the impact and challenges that affiliated companies have brought to corporate mechanism. Partâ…¢ first introduces relevant legal systems and academic achievements available in the world, then comes up with some practical suggestions for the legislation of our country by applying all these academic achievements to the economic practice in China.Special appreciation goes to all those who have helped me in the preparation of this paper. Because of the tight schedule as well as the limit of my capability, minor omissions are inevitable. Therefore, I am awaiting your kind criticism and correction.