The Company Invested Strictly Limited To Reasonable Restrictions

Company reinvestment is a "double-edged sword", one side, as the elementary means to maximize the profit of the company through management, Reinvestment has the function of promoting the appropriate scale of operation, strengthening the ability to resist risk and market competition; on the other side, When risk appears, it can make the capital of the company go up illusively, and make the company lavish its power, the benefit of its shareholders maybe harmed thereby. The Company law of the People's Republic of China was legislated warily, and adopted the model of strict restriction to reinvestment. But, up to now, this kind of legislative model cannot adapt to the high-speed development of economy. Through reviewing legal definitions, legislation development, pros and cons of reinvestment, this article introduces and analyses the reason and the juristic circumstance of the regulation of reinvestment, and elicits a conclusion that our country should relax the restriction to reinvestment, and take the model of logical restriction to reinvestment. Beginning with the reality of our country, the writer will bring forward the structure design and the legislation advice to the logical restriction of reinvestment.The article is made up of four parts.The first part begins with the legal definitions of reinvestment, clarifies the essential, style and notions correlatively. Through the investigation of the regulation and the legislative models of other countries, find out that the regulation of reinvestment is according to the development of economy.The second part discourses upon the current regulation model of reinvestment of our country. The model of strict restriction to reinvestment was compatible to the economic environment at that time. But nowadays, the market economy is more consummate; this kind of model is not compatible anymore.The third part base on the economic environment and the legal background now,think that our country should loosen the restriction of reinvestment. But based on the legislation tradition of strict restriction of reinvestment and practical economic environment, our country should not loosen the restriction absolutely. But adopt the model of logical restriction.The fourth part has described the design of the system of the regulation of reinvestment emphatically. Based on the adoption of the legislation model of logical restriction to reinvestment, the author brings forward the legislation suggest to the article 12 of company law, in addition, brings forward the legal ideas and legal system of reinvestment in conformity with the model.