The Interests Of The Creditors Under The Limited Liability Regime To Protect

Limited Liability System is a crucial system in Commercial Law field and is considered as"corner stone of Corporate Law". The rise of Limited Liability System has a positive meaning for both investors and shareholders in the way that it greatly reduces the risks and deeply stimulates the interest of investors so that it promotes market transactions. However, while Limited Liability brings a series of conveniences for investors, it also brings various concerns for creditors. Limited Liability was concerned so much about protecting the interest of the investors at the beginning of its foundation that distracted the risks of the investors. This distraction in fact hands over the risks from investors to creditors. However, legislation does not give enough concern to creditors. Therefore, the creditors'interest often suffers from loss and lacks of reasonable relief. Shareholders often take advantage of independent corporate property and shareholders'limited liability to affect the interest of creditors, such as malicious cancellation of the company and illegal transfer of property. As Creditors'third person identity to the company means that creditors can not be involved in direct management of the company。Therefore,the information that creditors'obtain is outdated. It is unlikely for them to supervise corporate property. In addition, according to traditional legislation view, capital credit rather than non-capital credit is set as the foundation to judge the credit of the company, which does not reflect the property held by the company. When shareholders evilly invade the creditors, reduce the repayable capital, the creditors do not know anything until they are on relief by means of law. Legislation and judicial protection seems especially urgent for creditors.In practice, the majority of the loss of creditors is caused by illegal behaviors of obligor.It seems far more than enough to just require debtors to obey the law in order to protect corporate creditors'rights. This article points out that creditors themselves have to carry out certain actions to avoid the loss of interest.The dissertation consists of 5 main parts. By the research on limited liability system, analyzing the strengths and weaknesses of current protection measures on creditors, learning advanced theories from creditors protection systems overseas so as to provide a thinking for the improvement of the current protection system on creditors.