Study Of The Company's Articles Of Association Legal Issues

The implementation of Company Law in 2005 has opened China's era of Company Law self-government. The realization of Company Law self-government largely depends on the company's charter. As the norms of corporate behavior, articles of association have great impact on the rights of specific capacity for action. The operation of a company is of great significance in whether articles of association can play an important role and to what extent. The key to make a company's charter play a role is to clarify the nature of a company's charter and to understand the relationship between a company's charter and Company Law. Based on the key, the legal status of articles of association is determined, and the problems in judicial practice are resolved. Another attempt to expand the basis of company is to extend the self-government boundaries of a company's charter.The body of this paper is divided into four parts:The first part is a historical study on charters of companies, based on research on the development of a corporation's system and the relationship between system and Company Law. The part also introduces the development of companies' charters and the trend of development, and concludes that a company' charter has experienced the process of document conversion from arbitrary provisions to general provisions under the adjustments of Company Law, and also the process of reunification from generalization to personalization under the permission of Company Law. In Chinese Company Law, the changes of relative provisions regarding companies' charters indicate that Chinese Company Law is a product that conforms the times.The second part mainly studies the nature of the company's charter, in order to lay the cornerstone of the following study. With regard to the nature of a company's charter, there are two doctrines, Contract doctrine and Autonomy doctrine. The former is respected by most scholars of Anglo-American Legal System, while the latter is advocated by some scholars of Continental Legal System and scholars of Japanese Law. The author believes that any doctrine of the self cannot rule out the existence of another theory's rationality. So the author brings a new way, the nature dichotomy, to classify a company's charter into two types, the initial charter and the amendment to the Constitution. New conclusions come out by distinguishing the different nature of the two types.The third part analyzes the relationship between a company's charter and Company Law from a normative perspective. A company's charter and Company Law are antagonistic to each other, but also compromise each other. The necessary intervention that Company Law does to a company's charter supplements, refines, and excludes those regulations which are beyond the mandatory provisions of Company Law. However, the author would like to focus on situation in which a company's charter is antagonistic to Company Law, and combines the rule of "whereas there are separate provisions by law, those provisions shall prevail". Nature dichotomy of companies' charters and the relationship between a company's charter and Company Law are applied to analyze controversy in judicial practice.The fourth part discusses the core issues in this paper. This section attempts to observe a company's charter from the perspective of judgment of source of law, the situations that the provisions in a company's charter should be the basis for the decision of the case. There are originally two of such situations. First is the damage liability undertaken by directors and supervisors in violations of the company's charter (Article 63); Second is the damage liability undertaken by Board of Directors when they are in violation of the company's charter and caused serious losses(Article 118). In 2005, Company Law added another four charter provisions as source of law. First, the applicable law of piercing the corporate veil (Article 20). Second is the applicable law of the resolution of revoking by shareholders and the Board of Appeal (Article 22). Third is the applicable law of shareholder representatives' litigation (Article 152). Fourth is the applicable law of a direct shareholder proceeding (Article 153). In Company Law, the rule that taking a company's charter as the basis for judgment reflects Company Law's trend of private right.