On Counterparty’s Review Obligations Of The Company’s External Guarantee

The establishment of a corporate guarantee system plays great significance topromote financing, commodity circulation, and security claims to achieve. Thestakeholders involved in company’s external guarantee include the company’sinterests, the interests of secured creditors and the interests of shareholders, theeffectiveness of their behavior is directly related to the parties responsibility sharedand the company’s operating costs and risk control. The company’s externalguarantee is also a behavior often occurs in practice, and the counterpart’s examineobligations of the company’s external guarantees, theorists from differentperspectives, practitioners referee scales are also different. From one side this showsthat the company’s external guarantees is very important, for its counterpart to reviewobligations analysis and research have important practical significance whatever inacademic or practice.The company’s external guarantee is defined according to legal provisions or theparties have agreed, the company with its own credit or a specific property or assetsof the debtor to guarantee discharge debts, When the debtor can’t fulfill obligationsassumed responsibility for a security guarantee acts as guarantor to the creditor by thecompany on behalf of the debtor. The new provisions of the Act have on thecompany’s external security system a major breakthrough, the company’s externalsecurity capabilities to be sure, and to standardize the decision-making bodies anddecision-making procedures of the company’s external security, but due to thepresence of a large number of security breaches and internal governance of factorsimperfect, imperfect laws and regulations, resulting in increasing market risk, but alsoharm the interests of the company, shareholders and secured creditors. How toregulate the behavior of external security company, one of the key points is to reviewthe obligations explicitly guaranteed contracts relative person.Starting from the basic principles of company’s external guarantee, study thecompany’s external guarantee by the method of comparative of the study, describes the legislative changes relating to the company’s external guarantee, make acomprehensive comparison of external guarantee through the longitudinal course ofevolution and horizontal comparison that domestic and foreign Review of legal norms.In summing up the results of domestic legislation, drawing on the experience offoreign legislation on the basis of the type and function of company’s externalguarantee to sort out and clear institutional significance of its existence.After a pair of legal analysis on company’s external guarantee, the articles makethe literal interpretation of the new "Company Law" Article16, paragraph1. Becauseof the importance of the provisions of the Articles of Association, the article thenfocuses on the effectiveness of the Articles of Association of the publicity, and thenmakes in-depth research on the counterparty’s review obligations of the company’sexternal guarantee. Clarify the obligations associated with the relative configurationof people to review the legal representative of ultra vires and further clarified theobligations in the review criteria for judging the relative who in good faith, theultimate responsibility to review the impact of the obligations arising from theconfiguration carried analysis found that relative to the contract one lesson toappropriate review does not result in contractual obligations of both liabilityimbalance.While based on affirming the counterparty’s review obligations of the company’sexternal guarantee, the review article further to research on the standards ofcounterparty’s review obligations, the review focuses on the obligation is to followthe form of the standard of review or substantive examination standards. Due todifferences in different forms of company governance structure as well as to protectthe interests of different subjects chosen in external guarantee, and have a greaterimpact on the scope of the obligation secured a contract to review the contract, so Idiscussed in the previous text on the basis of Listed companies and Limitedcompanies and discusses its governance structure features and options to protect theinterests of the external security of the object, and further defined the scope of thecounterparty’s review obligations.