Mutual Holding Legal Study

The phenomenon of company cross-shareholding first appeared in the developed capitalist countries, for which Western countries made different system arrangements according to their national conditions. The history of China's modern company system is relatively short, so the phenomenon of company cross-shareholding in recent years is the new situation of the practice of the economic life. The company cross-shareholding case happened between Guangfa Securities and Liaoning Chengda in 1999 was the first China's company cross-shareholding law case. Since then, the phenomenon of company cross-shareholding in China's economic life has been a common occurrence. But China's relevant laws did not have any of the provisions of company cross-shareholding resulting lack of clear guidelines and norms. With the continuous exploration of company cross-shareholding in China's economy practice, there is more and more requirement on further investigation and research in this area. Based on the research, we can perfect the legal regulation of company cross-shareholding.In view of the current law lagging behind in the related areas, this paper made a depth study for the company cross-shareholding to reasonablly regulate and actively guide companies in China's economic practice of cross-shareholding, and improve China's legal system related. Make it compatible with the current economic development and create conditions for our laws to couple and integrate the relevant laws of developed countries. In this paper, six parts of the cross-shareholding between the companies were discussed:The first part is the basic theory of company's cross-shareholding. First define the concept of company's cross-shareholding. Then analyse the types of company cross-shareholding under different standards. Finally, make comparison between cross-shareholding companies and affiliated companies, investment companies to switch.The second part is the positive and negative aspects of the analysis of the company cross-shareholding from the pros and cons. On the one hand, company cross-shareholding can reduce the company operating risks, develop economies of scale, lower transaction costs, stable the company's operating rights. On the other hand, company cross-shareholding will result in inflated capital, distort the company's management structure, hinder normal trading order in the securities market and easily evoke monopoly acts.The third part is the empirical analysis of cross-shareholding companies. For the example of the case of parent and subsidiary company cross-shareholding between ST Qisha and Guizhou Dazhong, make empirical analysis of the cross-shareholding companies.The fourth part is on the status quo of the legal regulation of the foreign companies on cross-shareholding. Make systematic comparison of the state of cross-shareholding companies, respectively to the United States, the United Kingdom, Germany, France, Japan, as the representative of common law and civil law.The fifth part is of the state and defects of legal regulation of China's cross-shareholding of the company. China's new version of the "Company Law" and the "Securities Act" in the cross-shareholding companies did not make a direct specific provisions, only some departmental rules and local laws and regulations did. because the legislative level islow, and the contents are simple and lack of operation , they hardly make the effective legal regulation on the cross-shareholding in economic life.The sixth part is the personal recommendations of legal regulation of the cross-shareholding companies in China. First, it should be clear the legislative value to tolerant the cross-shareholding companies and allow companies to a certain percentage of free cross-shareholdings. Secondly, I propose that "differential treatment" be used in legal regulations between cross-hareholding companies. The cross-shareholding between the parent and subsidiary companies should be prohibited; the cross-shareholding of non-parent-subsidiary companies is not, in principle, prohibited, but the proportion of cross-shareholdings, the right to vote of cross-shareholdings exceeding a certain proportion should be restrict and components information should be public. Finally, the matching systems of cross-shareholding companies should be improved, including the system of the board of supervisors, the independent director system, as well as the legal consequences of illegal cross-shareholding.