Research On Legal Issues Of Company Guarantees

The company, as one of the important subject of market economy in the process of operation and development, it offers a guarantee for others in order to obtain more potential trading opportunities or for more convenient financing, and this kind of phenomenon has been more and more common. However, when we inspect different legislations of foreign company guarantee practice, we can find that,in the early legislation, some countries impose strict restrictions on the company guarantee regulations. But due to the development of economy and practice, most of the countries had improved the law and admit the guarantee ability of the company. At the same time,the legislation regulate the guarantee ability of the company from the guarantee conditions, guarantee programs, decision-making authority etc. The legislation in our country’s attitudes towards the company guarantee ability also experienced a transition from conservative to the more relaxed attitude. In fact,the company law enacted in2005has emphasized the company’s articles of association autonomy on the guarantees, and hold a positive attitude to guarantee ability of the company, this is a big leap for the company guarantee legislation of our country.The latest company law modified in2013continued the company guarantee specification in2005. However, as to the interpretation and the apply of the company guarantee norms, there are a lot of controversy, in both academic and practical circles, this created many "The same case, but different verdicts" phenomenon in judicial practice, and caused serious damages to the legal justice and credibility. Among them, the most heated debate are the judgment of hypothec person in good faith, the standard of examination duty,and the effect of in violation of the constitution guarantees clause. The paper attempts to study the above problems.The first part:the guarantee ability of the company. In this part,the author uses the comparison analytic method, compared the company guarantees legislation of both common law and civil law countries, and conclude related beneficial experience that can be used for our country. As to the problem of company guarantee ability, the law should respect the needs of economy and the society,on one hand grant autonomy for company guarantee, at the same time should set up relevant legal mechanism and decision-making process, relies on the perfect corporate governance structure to regulate the behavior of the company guarantee, play a positive role on the company and avoid risk.The second part:the company guarantees security right of review obligation. The intersection of the16th item between5th item is that "knows or should know", in other words, whether the security right person has the review obligation. There are three kinds of academic point of view,that is yes, no, and the compromise. This paper argues that the intent of the legislation about16th item in company law is clear and definite guarantee resolution authority and resolution procedures to the public. The guarantee clauses of the articles has external effect, so the security right person fulfill its obligations to review is rational, and this kind of review is formal examination, it just need to review the legitimacy of materials like the company’s articles of association and decisions, other than its authenticity.The third part:the effects of the company constitution in violation of the guaranty. According to company law of our country, the company constitution can set separate regulations on items of the guaranty. Therefore, if the company constitution has explicitly stipulated in the articles, then we should obey the rules. But there are many cases of guaranty in violation of the constitution in practice. Therefore, this part analyzes the situations that the company may be in violation of the constitution, and clear its effects.The fourth part:the problems about the guarantee legislation and relevant improve suggestions. At present, the specific legal provisions of our company guarantees are too simple and rough, this affected its operability; the effects of the illegal guarantees are not clear; The lack of substantial limitations for company guarantees etc. On these issues,we learn from foreign experience in first part, put forward suggestions for improvement,and refine the law provisions, clear the effects of the illegal guarantee and to strengthen its liability. At the same time, improve the corporate governance structure, strengthen the obligation of company directors, managers and other senior executives.