On Companies To Switch To The Investment's Legal System Modifications

Over ten years enforcement of corporation law has provided us with some precise perception to institution and governance of corporation law, as well as rational assessment thereto. The incoming revision of corporation law is to apply summarized experiences learned from practice and creation of institution to structure future corporation law with references to foreign counterparts.The theme of this thesis focuses on subjects relating to the design of legal institution of corporation re-investment in the revision of corporation law. Methods of value analysis and empirical analysis are applied, Sino-Western cross-comparison and legal inheritance research are exercised in this thesis, which intend to draw clear silhouette of status in quo and ideal status of legal institution of corporation re-investment in various legal systems at different economics developments stages.First part starts from defining conceptions involved in article 12 of corporation law to determine scope of research. Then, it construes reasons for corporation re-investment in terms of economics consideration, followed by enunciating superficial and substantial cankers that might be brought by re-investment, and draws a conclusion that it is necessary to prevent cankers likely brought by re-investment to maintain economic order and protect lawful interests of minor shareholders and creditors. In part two, this thesis accounts for legal institutions in western countries regarding corporation re-investment issues, and concludes that measures taken to prevent disadvantages are frequently seen as regulating related-transaction resulted from re-investment, master-puppet relationships among corporation group. Part three is the key of this thesis. Part three lists examples to enunciate that uncertainty and confusion do exist in the application of the article 12 of the corporation law that is frequently eluded in practice. Thus, the anticipated purpose cannot be effectuated. Then proposes suggestions to fix loopholes on basis of current legal structure. Then, construes that legislative concept shall be evolved to catch pace of social and economic development, and ideal status of legal institution of re-investment shall be that corporations achieve autonomy of will, i.e. corporation law provides action pattern for reference, whereas corporation is not subject to abidance. Cankers likely to be brought by re-investment can't be eradicated by imposing restrictions on corporation re-investment, which can be prevented by establishing and consummating relevant institutions in corporation law.