On The Liability Of Directors Of The Corporation

Stock company is the basic form of modem enterprise system and enterprise organization system which suits the great modernized production. With discarding the centralism of the shareholder's Annual General Meeting(AGM)and advocating the centralism of the board of directors, directors'status extends increasingly. Since directors act as the entra of right, obligation and duty, their obligations and liabilities must be improved while their right extend continuously.It is a pity that we did not launch enough emphasis on directors and their liabilities in Chinese Company Law. In order to prevent the functions and powers of directors from being abused,it is necessary to enhance studies on the directors and the their liabilities of corporation. In this paper I will focus on some issues such as directors'legal connotation , legal status , directors'obligations and liabilities through comparative argumentation on legislation and theory of foreign company and I will give some idea on how to promote the consummation of Chinese Company Law. This paper is of the opinion that, one precondition for estabishing the directors ' liabilities is to definitude the legal relation between directors and their company. In my opinion, this relation means directors' legal status that should be defined accredited contract relation. Another precondition is to definitude the directors'obligations which based on the directors liabilities. In fact, it is the basically demand that directors'duty of loyalty and duty of care should be paratactic and united. Directors'liabilities include two forms, one is for the company and another is for the third party.