On The Legal Validity Of Our Country’s Limited Liability Company External Guarantee

Guaranty of the company is the company’s behavior to guarantee the liabilities ofa third person who outside of the company. Under the condition of market economy,To get more trading opportunities and enhance the competitiveness of enterprises,Company providing guaranty is widespread. But the company’s guaranty is at risk.Itmay endanger the company’s credit, and harm to the interests of the company and itsshareholders. While company guarantee ability is certain in Corporation Law of China,the decision authority, warranty procedures and guarantee amount are limited.This thesis mainly studies the legal validity of limited liability company’sexternal guarantee in our country. China’s corporate governance system is not yetmature, and the law of company’s guarantee is simple and even fuzzy, which easilylead to ambiguity, can not effectively guide the practical operation, bring manyproblems of application. The provisions of the company’s guarantee of Article16inCorporation Law of China are applied indiscriminately in conjunction with thecompany’s type.It did not fully take the characteristics of LLC into account. On theissue of company guaranty, Corporation Law pay attention to the role of the articles ofassociation, but did not set rules for the legal validity of company external guaranteewhen the articles of association have no provisions or have prohibitions.Can thecompany provide guarantee when having no provisions? If can,which organizationhave authority to decide? If can not,whether the guarantee contract shall be invalid?After the contract is not valid who should bear the responsibility for it?When the company’s legal representative, directors and senior managers provide guaranteebeyond their authority,Shareholders how to protect the company’s and their interests?Existing legal and regulatory provisions themselves did not give a clear answer, weneed further discussion.This thesis is divided into five sections.The first part is introduction, main statingthe background and significance of subject selection, Summary of domestic researchliterature and research methods. The second part mainly introduces the legislativesituation on the company’s external guarantee in China,from the article60thirdrevision of1993Corporation Law to article16of2005Corporation Law,I focus onanalysis of the relationship and inadequacy between the regulations. Part threeanalysis important legal principle contained in the company guarantee system toclarify the dispute from the source and find reason of inadequatelegislation.Respectively the thesis talked about the characteristics of LLC, Companyguarantee capacity and its limit, and legal relations in the company guaranty. Basedon the existing legislation, and the guidance of the analysis in the third part, Part fourdistinguish several different situations put forward my views on the legal validity ofLLC guaranty, help to benefit of company’s external guarantee system. The last part isconclusion, summed up the main content of this thesis and the center point.