External Security Research Firm Legal Effect

The new company law of the People’s Republic of China (hereinafter referred to as the“new company law”) is issued by the18th session of the10th standing committee ofNational People’s Congress on27th October2005on the amendment of the company law ofthe People’s Republic of China in1993(hereinafter referred to as the “old revision ofcompany law”). The article16of the new company law firstly clear definite the company’sability to provide external security in China. From the view of the existing legal basis, thearticle16of the new company law is the company’s main legal basis of the validity ofexternal security. While the article16stipulated in the new company law only has generalterms and how to define the ambiguous validity of external security which leads to differentcourts’ understanding to the relevant case in the judicial practice. This practice is notconducive to unification of legal implementation and also causes many disputes.Thesis case analysis on the validity of external security is less than related theory onthe definition of the validity of external security. In order to proof and analyze the definitionof validity of external security in practical perspective, considering Jiangsu Yinda scienceand technology CO., LTD guarantees case as the researcher together with the instructionalcases of the gazette of China supreme people’s court (from the classic case) and combiningwith the research achievements of academic circles and the judicial practice experience andadapting case analysis, theory with practice and the comparative analysis and other researchmethods, I apply the legal principle to the guarantees articles research in the new companylaw. On the basis of above research, combining with present legislation situation in ourcountry, I analyze Jiangsu Yinda Science and Technology Co., Ltd.’s guarantee case toconclude that the author’s attitude and cognition on the validity of external security andfurther the author puts forward suggestions of. I wish this research would be a greater helperfor theory research of validity system of external security.