Research On Legal Problems Shareholding System Company Cross

With the vigorous development of the market economy,the company, this kind ofcommercial subject has constantly become more complicated. Professional managersand other emerging career has appeared; the run mode also entered into a kind ofBoard-of-Director Centralism, all of these were matched to the development of themarket economy. As the backbone of the economic subjects, modern companies expandtheir own power not only rely on their own capital accumulation but also get morebenefit from the capital market. In this period,the cross-shareholding played animportant role in cross-shareholdings.Cross-shareholding is a kind of association among the companies which refers twoor more companies are the interlocking sharehoilders by holding each other ’s sharesbased on a certain purpose.Cross-shareholdings have pros and cons practicely. On theone hand, it can be lead to the stable management power; development of strategicalliance, against a hostile takeover, a lower transaction costs and others; On the otherhand, capital inflated, a distorted corporate governance structure, the monopoly,and theuncompeted market will be caused. To the negative effects, the countries’ have madedifferent legislation according to its own specific legislation and the development ofmarket economy. Acoording the Extraterritorial Law, it can be devided into threelegislative modes: the liberal legislative modes; The strict constraints legislative mode;Distinguish between treated Legislative mode.Cross-shareholding appears late but develop fast. But the legislation of it in ourCompany Law has the flaws. This paper will put forward some feasible suggestions,based on the legislative flaws of China’s cross-shareholdings, combined with thelegislative model of the world.This paper has four parts:Part1. The analysis to the modes of cross-shareholdings system, then, we state thecross-shareholdings connotation, classification and compare with the concept associatedwith it, and analyze more on the pros and cons. Altough,a stable management power; development of strategic alliance, against a hostile takeover,and the healthy developmentof the securities market can be lead to. At the same time, capital inflated, a distortedcorporate governance structure, the monopoly can be caused. Also, the creditors’ andminority shareholders’ interests will be threatened.Part2. A legal analysis of the the extraterritorial law system mode. First, itsummarizes the three legislative mode: the liberal legislative modes; The strictconstraints legislative mode; Distinguish between treated Legislative mode. Second, itcarries out a detailed exposition of the above national legislation on cross-shareholdings,based on the United States on behalf of the Liberal legislative model, represented byFrance’s strict constraints legislative mode and to Germany, and Japan as represented bydistinguished between treated legislative mode.Part3. Cross-shareholdings in China’s development and the legislative status quo.With the conduct of the reform and opening up, the cross-shareholdings was introducedinto China and developed rapidly under the support of the national policies. However, thegradual revealing shortcomings has been brought an unexpected crisis. At the same time,The hysteresis of the legislation on cross-shareholdings is not matched.Part4. The legislative analysis and perfection of cross-shareholdings. Also,theshortcomings in our laws. Combined with our national conditions, the strict constraintslegislative mode should be taken. The cross-shareholdings treatment should bedistinguished between parent and subsidiary companies and non-parent and subsidiarycompanies. cross-shareholdings among the parent and subsidiary companies should bestrictly limited. And the cross-shareholdings among the non-parent and subsidiarycompanies should be limited in proportion and voting right. The information disclosureshould be encouraged. At the same time, The Independent Director System; someinstituion like the disregard of corporate personality, the Anti-monopoly Systems and theconsequences of violating cross-shareholdings should be completed.