On The Debt Funded And Its Legal Regulation

With the development of market economy and capital market competition isincreasingly fierce, in the creation of knowledge economy times the world in the formof investment in the emergence of new changes, in addition to allow investment incash and non-cash contribution limits allowed. Survival of the fittest, survival of thefittest. China in order to face the change rapidly economic competition, legislatorsalso tried to start a limited relaxation of the company’s investment forms. China’snew" company law" article twenty-seventh provisions of the company can beevaluated by currency and may be transferred according to law the non-monetaryproperties, conditional allows the non-cash contribution. From the strict legislationrelaxed the shareholders investment property, tell from particular significance, thisallows shareholders to debt financing become possible. In our modern enterprisesproperty amount, creditor’s rights has actually occupy a great proportion. And we alsoshould be rational awareness, rapid economic development in the market today,property circulation also has not only limited to physical distribution, also includesthe idea is current, while the latter is the main mode of circulation is the creditor’srights transfer, which is bound to make claims to be economic development and therule of law represent the general trend of change.Besides introduction and conclusion, is divided into the following four parts:The first part: the introduction of claims legitimacy. This section includes thefollowing three parts:First, discusses the physical contribution of five components: a deterministic, i.e.to specific clear which now can be funded B. The existing value, the contribution ofthe material must be existing, prohibition of limited duration or conditional non-cashcontribution C. Evaluation of possibility, namely on the show for explicit valuation D.Independent transferability, the contribution of the material must be mutually transfere. Have profit ability, can for the company and the investor benefits. Throughdiscussing the physical contribution condition, can it discusses the claims to delineatethe lowest admission baseline.Secondly, based on the new" company law" the relevant provisions of articletwenty-seventh analysis on the legislation about the legal form of capital, the standard that property, can be monetary evaluation, independent transfer and does not violatethe law mandatory laws and regulations.Finally, through the detailed discussion of the creditor’s rights investmentconcepts and debt-funded fitness requirements, draw in full compliance with thelegislation in our country about the investment in the form of the standard result. Forexample, through discussing the creditor has its own property, can be assessed,transferability and the legitimacy of such attributes, in company law for allowing anon-cash assets investment and debt financing agreement. The influence of claims itcan internal determinants of capital.Part second: first through the specification of creditor’s rights in modern societyproperty system the important position demonstrates the necessity of the creditor’srights investment. Secondly, through the comparison of the countries of continentallaw system and Anglo-American law system in the legislation concerning the claimsrules, detailed elaborated on China’s allow claims of necessity, proved to allow claimsis responsive to the inevitable trend of world economic development. Then discussesthe system of capital of our country company to our country allows the debt financingeffect further elaborates the realistic possibility of debt financing. The effects ofexternal factors can be funded debt.The third part: mainly discusses the claims of defects and potential risks. Thispart discusses in detail the creditor’s rights investment defect and risk reasons andmain body, so that the debt financing is difficult to assess the uncertainty, and safety,there is a great danger, easily lead to moral hazard problems the conclusion, but alsofurther reveals the defects of the creditor’s rights investment may bring all sorts ofreality problems, such as will damage the interest of the creditors of the company, orby controlling shareholders using damage the interests of small shareholders,shareholder false capital contribution and smoke escape contributive problem.The fourth part: the legal regulation of some conception of debt financing. Theportion of the catch above mentioned claims exist defects and on the basis ofperformance, and then presents itself for the regulation of debt financing somelegislative suggestion and conception. As for the creditor’s rights investment can bringthe risk, the author also tries to set the following strict measures to regulate: clear debtfinancing main body qualification, perfecting relevant legislation making debt transferregistration system, clear the creditor’s rights investment conditions and limitations ofcreditor’s rights investment proportion, establish a strict debt financing guarantee system, strictly the claims procedure afterwards, perfect management supervision andafterwards sanction system and other measures to prevent. At the same time, we canalso learn from foreign countries on debt financing legislation mature regulations,make up the current legislation of our country long-standing principles in terms ofmore specific terms without embarrassment and blank. Eventually the debt financingcan truly become a cost-effective investment activity, namely low cost investment andobtain high interest, real service to social and economic development, stimulative folkcapital efficiency and the prosperity of social economy.