"Gome War":Analysis On Actual Control Rights Of Corporation

The author is enlightened to think about the legal control rights and actualcontrol rights of a company for the occurrence of “Gome War”. Though GomeElectrical Appliances Holding is restrained by Hong Kong company law, its mainmarket is in China. Consequently, the problems occurred during its operating alsoreflected the similar problems of Chinese companies. The formulation of companylaw of China shall pay attention to actual control of company. The legal control ofcompany, which allocates the static power of the company shall accord with theactual control. However, a main body that legally owns the company does not controlthe company actually while another main body that does not legally owns thecompany performs the control right of the company in fact. As a result, such abuse ofpower causes damage to the management of the company. The actual control of thecompany is a kind of facto right with indelible independence. The actual operation ofthe company is determined and affected by both the legal control and actual control ofthe company objectively. The legislation of company can not be made withoutconsidering the existence of actual control of company, but pay enough attention tosuch actual control and seek the management method. The paper aims to put forwardthe idea on actual control system of company and provide some theoretical supportfor the shortening of difference between the legislation of company and actualoperation of company based on the analysis on the relation between legal control andactual control of company.Firstly, the author deduces three forms of legal control according to theallocation structure of right and power made by company law. Those are, thecollective control that is performed by shareholders through shareholders’ meetingand taken as the final control of company, the control that is formed by the board ofdirectors and manager’s performance of shareholders’ decision on behalf of companyto manage the company and execute the operation right, and the control of company that is formed due to the debtor’s application for bankruptcy or restructure to thecourt while the company is bankrupt. The first two forms of legal control are the keypoints of the paper. By the way of demonstration analysis, the essence and cause ofactual control of company are analyzed by the author to define that the actual controlof company is a kind of facto power that is formed as a result of various factorsduring the dynamic operation and out of the legal control of the company. Thecompany is actually controlled by such facto power. The relation between the legalcontrol and actual control of the company is deduced by the author as: the actualcontrol often dominates the legal control of company ulteriorly and the legal controlis catabolic. The actual control also forms supplement for the legal control of thecompany when the people who has legal control of company but not exercise thepower. The legal control goes with the actual control of the company, so the actualoperation of the company is determined by both legal control and actual control of thecompany.Secondly, the actual control of the company is classified as the majorshareholder control mode, operator control mode and actual controller mode by theauthor upon the analysis method of typification. The power exercising subject, reasonand way of actual control are separately analyzed and considered with the legalcontrol of the company so as to make clear the effect caused by the deviation of theactual control and legal control of the company.Thirdly, some supplementary ideas on management of company legislation areproposed by the author after clearing the relative concepts, relations and analyzing thetypes of actual control for the three modes of actual control of the company.The key point is made by the author as: the actual operation of the company isdetermined and affected by both legal control and actual control of the company. Thedifference between law and fact can only be reduced to capacity for great attention toactual control of the company.