On The Company's Capital Formation System

The system of the formation of the capital is related to the realization of thecompany system's function and the balancing of pertinent parties' interests. The systemof the formation of the capital includes the statutory capital system, the authorizedcapital system and the eclectic capital system, therein the statutory capital systemincludes the strict statutory capital system and the relaxative statutory capital system,the three kinds of the systems of the formation of the capital have their own specificcontents and applicable qualifications. among these three systems which is superior andwhich is inferior can be separately inspected from the points of view of the purports oflegislation on company law and the credit foundation of companies: the core of thepurports of legislation on company law are security and efficiency, the statutory capitalsystem attaches importance to security, the authorized capital system attachesimportance to efficiency;the credit foundation of companies is the companies' assetsrather than the companies' capitals, the statutory capital system reflects capital creditwhereas the authorized capital system reflects assets credit;however, whether from thepoint of view of the purports of legislation on company law or from the point of view ofthe credit foundation of companies, the eclectic capital system takes advantage of theforegoing two systems' strongpoint and keeps away from their shortcomings. Ourcountry's emendatory company law in 1999 still adopt the principle of the strictstatutory capital system, looking from the system per se and the situation of our country,this principle has its virtues as well as shortcomings. our country's newly emendatorycompany law in October, 2005 adopts the principle of the relaxative statutory capitalsystem, it unifies our country's current system of the formation of the capital;notadopting the authorized capital system accord with our country's social economic statusin quo;and by reason of the lack in moderate exceeding, it doesn't adopt the eclecticcapital system .