Company Capital Adequacy Principles

Corporate capital is one of three essential factors in modern corporation .That whether the corporate capital is sufficient affects corporation' s operation and the protection of interests of creditor and shareholders thereof . The whole article, divided into four parts', has researched the principle of sufficiency of corporate capital in detail, starting from the meaning of corporate capital, and put forward some advice for the perfection of corperation law of China..Part I mainly discusses the meaning of corporate capital and its function. "Capital" is not only an economical concept, but a concept in law. Corporate capital conveys substantial meanings. The article points out that corporate capital can improve the value of corporation and guarantee the payment of corporation' s debts, which indicates the meaning and function of corporate capital is the starting points in logic to study the principle of sufficiency of corporate capital.Part II is about the basic issue of principle of sufficiency of corporate capital. The principle of sufficiency of corporate capital, designed in concrete systems by Corporate law to against corrosion and false increase of corporate capital, is the product of the legislative ideal to banlance the benefits of people in law and philosophical values of social departmentalism. Although the principle of sufficiency of corporate capital is a system in law, the design, choice and creation of the system is operated around the value of security justice, and efficiency, trying find the balance point between "security" and "efficiency"Part III discusses the principle of sufficiency of corporate capital at the time of incorporation, including the study on prohibition of issuing stock by discount and evaluation and checkingsystems on physical assets and obligation of initiator for capital sufficiency. The author believes the system of evaluation and checking on physical assets needs improving and China' s current corporation law has some oversights and omissions on the aspect of initiator' s obligation at capital sufficiency.Part IV is about the principle of sufficiently of corporate capital in the process of corporation' s operation, discussing the distribution of corporate profits of system, the taking and limitation of corporate shares and the ruling of corporation to guarantee for its shareholders. The distribution of corporate profits must observe the rule of distribution of corporate profits. The article analyses the means and scope of obligation for illegal distribution, exactly pointing out certain legal obligation of shareholders and directors for illegal distribution profits. On the issue of taking and limitation of corporation' s own share, the arties analyses the status of corporation to get its own shares legally and the legal results thereof illegally, and dissects current laws of China. In the end, the author also analyses the regulation of corporation laws of many nations about the guarantee taken by corporation for its shareholder and the legal obligation of corporation caused by the illegal guarantee, and believes, that the rules of corporation law of China needs perfection on conduct body and obligation body.