The Perfection Of Domestic Corporation System Of Defective Establishment

Defective establishment means that in the various company establishment stages,relevant persons in charge fail to follow rules on entities and procedures of companyestablishment, which results that some unqualified firms become legal personality. But inthe matter of fact, the setting up of the company is illegal, whose legal status should bedoubted. Based on this, the third party who conducts with the illegal company may be atrisk when the trading happens. Therefore, if nothing is exerted to regulate this industry,damages will expand to all interest groups.The defect of company establishment can be roughly divided into conditionaldefection, constitutional purpose and procedural defect. China’s existing laws has noexplicit definition on the effectiveness of defective company, but there has been two kindsof mature attitudes toward this field internationally and has formed perfect corporationsystem of defective establishment which is available in European and American laws butunacknowledged in our country. Both manners have its own rationality but hold problemsrespectively. However, it is a tendency for the two big legal systems learning from eachother, which is also the case with the corporation system of defective establishment. Bothare trying to give consideration to the two values of security and transaction and build acomprehensive corporation system of defective establishment which is made up ofdefective withdrawal system, invalidation system, defect correction system and defectliability system.Based on the beneficial experience by comparative analysis toward the two lawsystem, plus a profound analysis on the current situation of corporation system ofdefective establishment, the researcher holds that the following questions should bereconsidered in the process of building our corporation system of defective establishment:it is wiser to hold positive attitude toward the effectiveness of defective company facing the background of weak economy in our country; setting up corporation system ofdefective establishment on the basis of admitting the status of defective companies: on thedefective corporation withdrawal system, the single system of following administrativepowers should be replaced by the system of combining administrative powers and relativepeople; building Invalid announcement system and perfect defect correction system;increasing the proportion of civil liability. In addition, some more should be conducted tolay down more effective and foresighted systems, promote economic development,guarantee interest subjects’ lawful rights and perfect our country’s law system.