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Subordinate Creditors Of The Company And The Legal Protection Of Minority Shareholders. Of Affiliated Companies

Posted on:2006-06-02Degree:MasterType:Thesis
Country:ChinaCandidate:Y WangFull Text:PDF
GTID:2206360155966293Subject:Law
Abstract/Summary:PDF Full Text Request
Affiliated enterprise is produced complying with the objective demand of large-scale social production. It has functions of promoting the operation scale, lowering costs, improving the market competitive capability, and reducing the business risk etc. These are all irrefutable facts worldwide. But meanwhile, there are specific interest relationship existing in the affiliated enterprise, control shareholder often shift unconventional assets and interests among affiliated enterprise through the related trade, thus damage the interests of the subordinate company's creditor and minority shareholders. So, it seems very essential to strengthen the legal structure to the affiliated enterprise to protect the interests of subordinate company and its creditors and majority shareholders. In view of this, through comparative research of relevant legislative situations in the main countries and regions of the world, especially in Germany, this paper explores the idea that can support the system of affiliated enterprise and protect subordinate company's creditors and minority shareholders. And then, regarding this idea as guidelines, it puts forward a legislative suggestion on protecting the interests of subordinate company's creditors and minority shareholders in hope that it is helpful to perfect the legal system of current market and all economic subjects in our country.This paper is divided in four parts:Part □ Relevant Legal Issue Concerning Affiliated Enterprise.Since the concepts of affiliated enterprise have not been generally accepted yet in our country, and the asserting standard is very fuzzy and confused, it is essential to define the affiliated enterprise as accurate and easy to hold as possible in order to protect effectively the rights of the subordinate company's creditors and minority shareholders, This is a prerequisite of research, and even can guide the research into deepening. So, in this part, at first, we have investigated relevant legislations of some countries and regions, sum up the concept of the affiliated enterprise, that is: a non-person enterprise association which formed by two or more single enterprises with independent status of a legal person existing control and subordinate or other related relations each other. Then it analyzes the insidestructure characteristics and external form further, and gives a clearer definition of affiliated enterprise. Finally draws out the legal problem of the affiliated enterprise: protection of subordinate company's creditors and minority stockholders.Part D Legal Protection of Creditors in Subordinate CompanyIt originally investigated and analyzed carefully several famous principles developed on the basis of legal precedent in common law: Piercing the Corporate Veil, Deep Rock Doctrine, Substantive Consolidation Doctrine. Then Take Germany law as an example, it introduces the legal protection method in continent law: case law combined with written law. Finally, this part reviewed the system of limited responsibility: On one hand we can't totally abandon the limited responsibility principle, on the other hand, we should prevent the shareholder from abusing limited company responsibility, the most important thing is to seek the proper equalization point between the two.Part D Legal Protection for the Subordinate Company and Its Minority ShareholdersBecause the countries of two fundamental laws demonstrate strong convergent inclination in protecting minority shareholders, and it has already reached the same goal by different routes in fact, this part has not introduced them separately, but sums up several kinds of protection methods in unison. At first, it gives controlling shareholder with the fiduciary duties, mainly introduces the form of expression of the duty of care and the duty of loyalty, and then has summarized the asserting standard of violating the fiduciary duties. Secondly, it gives minority shareholders with right of derivative suit and also pays attention to the limiting conditions. Finally it points out that we should protect subordinate company's minority shareholders through making the law, especially should draw lessons from the relevant regulations of Germany, for instance: ensuring certain dividend and bonus, etc.Part D Perfect the Legislation of Protecting Subordinate Company's Creditor and Minority Shareholders to Our Country.This part Originally examined the current legal provision about, the creditor and minority shareholders in our country, at first, it analyses the spontaneous and non-perfect legislation about affiliated enterprise in the present stage of our country, and points that the legislation lays particular emphasis on protection of public power(eg. the right of thegovernment revenue ), but neglects the private right, especially the interests of subordinate company's creditor and minority shareholders. So it is necessary to carry on company's regulation system to the affiliated enterprise. First, the author proposed the suggestion on the whole legislation of the affiliated enterprise, namely draw lessons from Germany and Taiwan, to set up the chapter of " affiliated enterprise " in the existing company law, and the content is mainly about the protection of each side's interests in affiliated enterprise. Secondly, in order to protect subordinate company's creditor, we should draw lessons not only from the stipulating of written law of Germany mainly, but also introduce above-mentioned principle of the common law, and give creditor advocate right of creditor's rights directly to control company at the same time, and carry out the inversion principle of the proof burden to light the proof bear of the creditor. Finally, in view of the protection of the company's minority shareholders, we should strengthen the protection in all respects, For instance: minority shareholders should have know-how right and policy-making right in the forming process; it should admit the fiduciary duties of the controlling shareholder clearly after forming, and should give the right of derivative suit to minority shareholder etc.
Keywords/Search Tags:Affiliated enterprise, Subordinate Company, Creditor, Minority, shareholder, Protect
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