Affirmation Of Validity Of External Guarantee Of Companies

The author starts with cases about judicial adjudication of the Supreme People’sCourt, studies validity of external guarantee systematically, emphasizes on analyzingrelevant regulations in The Corporation Law in2005, and then analyzes conditions ofvalidity of external guarantee contracts under different circumstances. It is found fromresearch in the article that although the Supreme People’s Court establishes standardsfor judging validity of guarantee contracts in form of cases, these standardsexcessively safeguard interests of guarantee companies but neglect interests ofcreditors and violate fairness and justice of laws. Even so, the main body is studiedbased on those standards; the only difference is that diverse opinions are expressed inthe conclusion and relevant cases of Beijing Supreme People’s Court are quoted fordemonstration. Even if cases about judicial precedent were issued Beijing SupremePeople’s Court in2011, it is a running start that they represent our attitude to externalguarantee in future.External guarantee of companies is an extremely important task, but relevanttheoretical researches in our country still lag behind. What is the validity of articles ofincorporation? What is the precondition for existence of examination duty of creditors?There are no persuasive statements in the theory circle about such fundamental issues and their inner meanings have never been expounded in judgements of the SupremePeople’s Court about cases of external guarantee. However, pioneering judgements ofBeijing Supreme People’s Court conform to legal principles but go against traditionsand fail to establish a uniform cognition legislatively and theoretically. Therefore,Chinese scholars should enhance researches on external guarantee of companies,consolidate theories and reconstruct relevant legal systems.The article has three main parts:In part1, the author focuses on analyzing cases about guarantee disputesbetween China Everbright Bank and Powerise issued by the Supreme People’s Court,reveals the judicial attitude to external guarantee of companies and introduces thetopical subject. It can be seen from cases of the Supreme People’s Court and analysisof judges about the case, the Supreme People’s Court attaches high importance tofunctions of articles of incorporation in external guarantee; or rather, articles ofincorporation impose decisive influences upon validity of external guarantee.In part2, the author selectively analyzes regulations in The Corporation Law in1993about external guarantee systems, finding that there are few relevant regulations.The third part is the core of the article. Regulations about external guarantee ofcompanies in The Corporation Law in2005are analyzed and its validity underdifferent circumstances is elaborated specifically, resulting in that the examinationduty of articles of incorporation, guarantee resolution and creditor influence validityof guarantee contracts. Furthermore, cases in the bulletin of the Supreme People’sCourt in February,2011are quoted to state the newest attitude to validity of corporateguarantee. Certainly, validity of external guarantee of one-member companies andlisted companies would be influenced by other factors due to distinctive types.