Legal Regulation Of Association Guaranteed In China's Listed Companies

Corporate institution is one of the most important institutions in the modern society. The principle of limited liability of Corporation law and the purpose of maxim interest of shareholders reduced the investment risk and increased the investment activeness, which provide the conditions for the development of the corporations. Traditional corporations'independent legal personality was based on their independent economy. Corporation is the independent legal body, who can conduct autonomous management and pursue the maxim profit of there own.As the development of social economy, in order to pursue the internalizing marketing under the effect of economy of scale, expand the market share, raise the competitiveness, companies set up a connected relationship among each other, build up Group Corporation. Through the internal connection of group, relocate and reorganize the resources to realize the best resources allocation and get the maxim profit. This combination for economic purpose called affiliated company. The business between them called connected transaction, which refers to the resources transferring between the affiliated companies or the commercial dealing for obligations. Ask a well known affiliated company who has a good capital to do the guarantee for the financing activities can reduce the financing cost and raise the financing effect. The guarantee company may have the disadvantage of contingent liabilities, but the guaranteed company may have the advantage of having the capital in hand. So the guarantee between the affiliated companies (affiliated guarantee) is also a connected transaction.As the affiliated companies have a relationship of control and dependency, the mother company inevitably has an economic control and impact on the subjected company, although the subjected company has an independent legal personality, due to the dependency on the economy,...