Study Of The Legal System Of Compulsory Liquidation Of Company In China

Being a great potential market means both its market subjects can enter the market easily and they do no harm to the market environment when they withdraw from the market. As the main business subject of market economy, company plays a guiding role of the development in the whole market. Company can be established since there is a certain consistency interest among the investors, creditors, employees and so on. But this kind of consistency is very unstable, because conflicts may occur at any time. When the company appeared disincorporation, which means it is no longer eligible for the conditions as a commercial subject, the bond of the common interest among the different interest subjects such as shareholders, creditors, employees and so on will facture, whereas the conflicts becoming more intense and sharper. Therefore the prior liquidation not only protect the interests of the creditors, but also means a lot to the company’s and its shareholders’reputation. But the company often slacks in their duty and fails to liquidate itself, and here comes the compulsory liquidation procedure, as a kind of remedial measures. It can help the market to obsolete those companies which don’t carry out the liquidation when they conform to the conditions of the dissolution, and to a certain extent, it can prevent related subject interests from being damaged at the same time. In china, we only have "On the trial of cases of compulsory liquidation work symposium" in this field, issued by the supreme court in2009. There are no other relevant regulations. But as the result of its just guidance, it only has a guiding significance to court internal work. So far, our country doesn’t have a complete set of systematic, practical and operational compulsory liquidation procedure. The weaknesses of the system created opportunities to criminal, and dishonest people would dissolve the company intentionally to avoid paying their debt. Therefore, the research on the legal system of compulsory liquidation of company in China has more practical meaning these days.By clarifying the connotation and particularity of company compulsory liquidation and analyzing the legislation present situation of company in China, we hope to find the problems existing in current legislation and concrete implementation of compulsory liquidation. On one hand, the legislative level is low; on the other hand, concrete implementation of compulsory liquidation has its imperfection from head to foot, in the startup phase, firstly, the reasons to start the whole process are too specifically; secondly, the startup mode is too single, and the scope of subjects are too narrow; thirdly, the legal effects haven’t been ruled precisely; lastly, the rules of acceptance and trial are not clear. During the process, the problems are as following. First, liquidation procedures haven’t been specified; second, the composition of members of the liquidation group and determine of remuneration haven’t been well informed; third, there is no debt repayment scheme validation mechanism. And in the ending part, we don’t know when compulsory liquidation ended in a protocol scheme way due to the property is insufficient to pay the debts, and whether the creditors can recover or not, if we found out that the shareholders had transferred property intentionally to damage the interests of the company after the incident; second, we don’t know when the company dissoluted since the number of shareholders was not in conformity with the statutory conditions, and if there are some new shareholders join in and make up for the lack, we can terminate the procedure or not.In order to let our country company system of compulsory liquidation be perfect, we can draw some lessons from foreign related system. On the base of the introduction of special subjects in the foreign supervision system, we shall establish supervisory mechanism of the compulsory liquidation of the company in our own country. We should consider from compulsory liquidation of company legislation and specific system in two aspects for the sake of improving the whole company mandatory liquidation system. In the aspect of legislation, enhancing the legislative status of company mandatory liquidation system; In terms of concrete system, forced liquidation of the company launch:first, to expand the start reason and star the main part of mandatory liquidation; second, the forced liquidation of the company operating company forced liquidation ends, third, to clearly define legal effect after the start of the compulsory liquidation procedure; fourth, to clear the rules of application for compulsory liquidation and the accepted rules of file for examination. In the company compulsory liquidation operation:firstly, to clear the liquidation group in compulsory liquidation; secondly, to determine the identifying rules of members in the liquidating committee and the remuneration rules; thirdly, to clear the establishment of a creditors’meeting system; lastly, to improve mechanism of the debt repayment agreement; To the end of compulsory liquidation:first, expanding the use of continue system in the system of mandatory liquidation; second, clearing the end-rules of compulsory liquidation.