The Construction Of China’s Incorporated Foundation System

Foundation system is one of the basic types of civil law corporations in civil law countries. In 1986, Our <Civil Law> did not use the classification prevailing in civil law countries for some reasons, therefore the foundation system has not been established. With the development of social life and the diversity of the public events generated, government may do not have enough resources and time to deal with all public welfare, so there is an urgent need to establish a system to supervise the civil public welfare. Currently, although there are many public interest organizations, but because of inadequate supervision and imperfections of laws and regulations, public interest or public services are difficult to operate, and organizations established for public interest ultimately could not get the public confidence. That`s a pity. I recommend that the nation is supposed to introduce the incorporated foundation system while developing the <Civil Code> to standardize operations of public interest organizations.The incorporated foundation system introduced should be a suitable system that references the foreign systems and combines with the basic social situation of China instead of a duplication. Focusing on the contraction of incorporated foundation system, this paper carries out a four-part discussion.The first part is a detailed analysis of why the incorporated foundation system should be established, the necessity and feasibility of the establishment of the incorporated foundation will be described. Firstly start with analyzing the deficiencies of the existing public interest organizations and classification of foundations based on China’s "Civil Law", to suggest there is a clear need to institutionalize the public interest organizations and improve its provisions. At the same time, describe the advantages of the incorporated foundation, to express views that establishing the incorporated foundations should be regard as a good policy. Secondly, based on our social situations analyzing the possibility of introducing the incorporated foundation system. Only it is possible to introduce, it is valuable to the analysis how to establishing the system.The second part is the basic idea of principles of our incorporated foundation system construction. The author, by studying and summarizing the basic theoretical concept, essence and other research about the incorporated foundation, outlines the basic principles of the incorporated foundation. They are: the principle of specific purpose, the principle of voluntary, the principle of public interest, the principle of property stable, the principle of long-term operating, the principle of information disclosure, the principle of public order and good morals. China should focus on these principles to build the incorporated foundation system and these cannot be violated. For example, the provisions about public welfare purpose, property, social supervision and other aspects leading by these principles. These will also be discussed in the third part of this article.The third part is detailed proposals for the construction of incorporated foundation. Through analyzing the type, establishment, operation, external supervising, termination five aspects of incorporated foundation, combined with the author’s knowledge and judgment of the situation of China, suggest the general direction of how to formulate the provisions. For example incorporated foundation classification shall be limited to the public welfare. About establishing, doctrine of standardization shall be taken. For Internal governance structure, council members, board of directors, board of supervisors is necessary.The fourth part is some legislative proposals. Different from the third part, although it still focus on incorporated foundation, but apart from outline of the detailed rules, legislative proposals in this part do not have too much relationship to construction of incorporated foundation itself. They are the discussion about several issues that may appear when we start to develop the legislation of incorporated foundation. Raise personal recommendations for the introduction of legislation pattern of incorporated foundations, the basic classification of corporation, legislative mode of special incorporated foundations, as well as tax issues.