Research Of Special Guarantee Of One-person Limited Liability Companies

The Company Law amended in2005complies with the changes of times and development of the market economy, in which the improvement specifically reflected by legalization of One-person Companies with Limited Liability and completion of company guarantee system. The effectiveness of special guarantee in One-person Companies with Limited Liability became the focus of discussion after the introduction of the Company Law. Guarantee contract dispute case between Bu Banggan and Kenima Company was chosen as a case study and relevant legal relationship in special guarantee of One-person Companies with Limited Liability was analyzed via the effectiveness of guarantee from One-person Companies with Limited Liability and Risk as research paradigm. Therefore, the key risk induced by a special guarantee behavior of One-person Companies with Limited Liability lies in the possibility of the interests loss of the company creditors was summarized by the author. Current legislation of special guarantee of One-person Companies with Limited Liability was inspected first by the author in order to solve the problem and various views were found existing at theoretical level:one is Theory of Provisions, the other is Theory of Technical Loopholes. The former theory started from perspective of system interpretation and logical interpretation, concluding validity or invalidity of special guarantee of One-person Companies with Limited Liability in current existing legal rules from various viewpoints; while the latter one discovered law blank of effectiveness of special guarantee in One-person Companies with Limited Liability and attributed this blank to negligence of technical immaturity of legislators. Taking the stand of legislators, the following conclusions were made by the author scholars with Theory of Provisions was holding a one-sided look on validity of special guarantee of One-person Companies with Limited Liability and simply emphasized on company autonomy or national mandatory, and even held two diametrically opposed, which is contrary to logic; while the Theory of Technical Loopholes absurdly attributed issues related with legal blanks to intention or negligence of legislators. The author’s opinion is that the legislators scientifically set aside certain legal blanks under the circumstance of incomplete development of one-person company system and provided reasonable space for future legal revision, and again proved that the certainty of effectiveness of One-person Companies with Limited Liability is hard to determine due to law blanks through investigation of judicial trial practices and economic activities. The result from both theoretical analysis and practical situations appealed to urgent introduction of relevant legislation. Some suggestions improving the system were initialed by the author after balancing the two main viewpoints. Mechanism for participation of company creditors in guarantee decision-making procedure shall be established considering benefit protection of company creditors. Public registry should be a key factor for effectiveness of special guarantee in One-person Companies with Limited Liability and the company should also be mandatorily supervised by particular auditor. Objects enjoy special guarantee in a One-person Company with Limited Liability should be only limited to debt owned by corporate shareholders from the view of legal person protection and the amount as well as decision-making procedures shall be clearly written by company regulations mandatorily. At the same time, the law shall stipulate that unlimited liability should be accused to shareholders against legal person’s benefit of the company under special circumstances when special guaranteed shareholders violate the law or offend the moral concepts.