The Research Of The Principle Of Capital Maintenance

In consideration of the company being the main subject of the modern business operations, thecompany system shall be becoming more and more important in development of the company, and as wellas the company capital system. With less restrictions imposed on statutory capital system by our currentcompany law and the assets credit theory being known and accepted by more and more people, manypeople insist that the principle of capital maintenance should not be subsisting, because it leads to a moreand more serious doubt of the role to protect the rights of creditors of the company, reduce the idle assetsof the company, improve the efficiency of capital utilization and demonstrate the company’s credit.However, I hold that the principle of capital maintenance is still contained in the current Company lawand the foundation of which can not be replaced by the assets credit theory, so it’s necessary to maintainthe principle of capital maintenance. The root of question is that they do not fully understand the real roleof capital maintenance principle. This paper analyzes the present situation and clarifies the role of theprinciple of capital maintenance and confirms the need of its existence, and puts forward the proposal tofurther improve the relevant laws and supporting measures on the purpose of the principle of capitalmaintenance’s playing a better practical role.This paper is mainly divided into four parts.PartⅠmakes an overview of the connotation of the principle of capital maintenance and the status inthe statutory capital system in order to lay the foundation for the further discussion.Part Ⅱ, on the one hand, analyzes the situation ofthe principle of capital maintenance and what thepeople on the principle of capital maintenance questioned，which include the definition of the principle ofcapital maintenance and the circumstances of the existence of the principle. On the other hand, this partresponses to questions above and pointes out the true role of the capital maintenance principle. Thefunction of assets shall be different from capital. Part Ⅲ provides an overview of the principle of capital maintenance in the embodiment of thecurrent Companies law, including the corresponding stipulations in the current Companies Act and in theCompanies Act before which had been amended, as well as the evaluation of the aforesaid stipulations.Besides, the before said overview is divided into two-stage (when the company is being incorporated andafter the company has been established) to be convenient to be analyzed. Then it not only analyzes thelegal practice mentioned in previous paper, but also forwards proposals to improve the legal practice.PartⅣ, to play the better role of the principle of capital maintenance and find a way out for thecontinued existence of the principle of capital maintenance, some suggestions including settingsupporting measures and clarifying the capital maintenance principle role are provided, on the basis ofthe above-mentioned status and legal practice of the principle of capital maintenance and itscorresponding discussion and analysis.