On Protection Of Creditors’ Interests During Company’s Dissolvement And Liquidation

Just as a coin has two sides, the company’s invention not only greatly facilitates the economic development but provides a tool for some evil persons to infringe upon creditors’legitimate rights. Since the invention of companies, the creditors of a company has not gained effective protection. The fundamental reason is that the design of the company’s system itself is full of blemishes。In other words, the limited liability of the company’s stockholders and their actual control over the company creats fine opportunities to cause damage to the interests of the creditors. Because stockholders can receive the asylum owing to the company’s limited liability. Over a long time, the stockholders, especially large ones often do harm to the creditors’ interests. Even with the continuing improvement and progress of company’s laws, it is still quite difficult to compensate the imbalance condition between the stockholders and the creditors brought upon by the limited liability system.Compared with the normally operated companies, the company’s dissolvement will exert even greater impact upon the interests of the creditors. For the company’s dissolvement means its bankrupcy, the company’s assurance to the creditors will turn from the whole assets and possible profits into single assets of the company. After the company’s dissolvement, the creditors’ rights will rest upon the distribution of the company’s assets. However, because the dissolved company has a lot of interest groups and the dissolving and liquidating procedures are quite complicated, it is not an easy job for creditors to obtain their credit rights. In China, for quite a long time, the company’s dissolvement and liquidation have always been the biggest obstacle to creditors to gain their rights. This remains the same even China has implimented the Judicial Interpretation Two of Company Law. There is no doubt that the Company Law represents the perfection as for the company’s dissolvement and liquidation, but it is confined to the judicial forceful liquidation, unexplicit liquidation procedure, a lack of restriction about liquidation groups and explicit time limit. It is a lack of relevent regulations after the company’s dissolvement and before the set up of liquidation groups. The above mentioned Company Law has set clear rights for the creditors’applying for the liquidation organized by the court, for the change of members in liquidation groups and the petition rights for damages, but it does not set the rules that any creditor has the right to participate in or supervise the procedures over the dissolvement and liquidation of a company. This shows the negative aspect about the protection of the creditor’s rights.Through the comparison of company laws among different countries, based on the immediate rights enjoyed by the creditors in the dissolved company, has summarized the deserved rights owned by the creditors during the process of the company’s dossolvement and liquidation. Meanwhile, in the light of the chorological order of the dissolving procedure and the company’s different impacts on the creditors, discussion about the protection of the creditors’interests has been made in the dissolving and liquidating stages. Combined with the national experience, a deep analysis has been made regarding the inadequacy of the protection of the creditors’ interests. Finally, in view of the actual conditions in China, has put forward a few suggestions over the inadequacy of protecting the interests of the creditors during the dissolving and liquidating process.