The Company Set Up The Flaws Legal Issues

The company is an organization established according to the law . We can say that the defective incorporation accompanies the company since the formation of the company system .The idea of incorporation defect refers to such legal facts as those that could have a negative impact on the stability of the acquired corporate or that could set its corporate personality into a state of disharmony due to some illegal or inappropriate actions during the establishment of the corporation.The main characters of defective incorporation are: the corporation has acquired a valid certificate though the registering form; there are defects in the process of incorporation; the incorporation defect causes to unfavorable effects on the personality of the company. Defective incorporation happens frequently, but the corporation law of our country cannot regulate it effectively. Therefore it has theoretical and values to research on the phenomenon.In view of the importance of the establishment of incorporation, it is the mutual view of the Anglo-American Law System and the Continental Law System to formulate a strict incorporation law. However, the rationality of legislation does not equal to that of practice. There always are founders who violate law to set up incorporations, which leads to the problem of defective incorporation. So the standardization of incorporation behavior is the necessity of company law. It is regretful that although our new company law has a great change compared with the old one, the contents concerning defective incorporation are almost the same, and their generality and practicability need improving.Part1: the introduction of defective incorporation.Part2, Part3: the author discusses the legislations of defective incorporation of the two main legal systems.Part4: concerned regulations and improved suggestions.