On Legal Force Of Company’s External Guarantee

With the development of market economy, guarantee system plays more and more important role in business operations of company in that it not only increases the reputation of company and obtains funds while guaranteeing the realization of obligatory right but also it promotes the circulation of idle funds among main body of market, which is beneficial to the sustainable development of market economy. Therefore, every country or district widely accepted that company guarantee system is the basic right of a company. Company guarantee system not only involved profit of company but also involved the profit of company’s shareholders and creditors. If the right of company guarantee was abused, it would not only damage stakeholder but also damage the public interest. So when giving the autonomy right of guarantee system, we should confine the guarantee behavior of company and maintain the balance of interest of all parties. Objective manifestation of confining the guarantee behavior is the affirmation of validity of company guarantee behavior. The validity of company guarantee behavior not only involves the responsibility of parties but also touch on the prevention and control of business risk and legal risk of company.The first part of the thesis overviewed the company’s external guarantee and clarified the concept, effect and legislation model of company guarantee system. Countries’ attitude towards the company guarantee changed from previous close confinement to affirm the autonomy right of company guarantee while restricting the company’s guarantee behaviors based on their own national conditions. Chinese company’s guarantee system also underwent a process that from accepting the principle of constructive notice and ultra vires to discarding them.The second part of the thesis concluded the current situation of Chinese company guarantee. By analyzing the companies guarantee system, legislation development and fact that the different judgment occurred in judicial practice caused the applies concerns of the 16th article and regulations in current Company Law, it demonstrated the necessity of clear the validity of company’s external guarantee in different situations.The third part of the thesis clarified the validity of company’s guarantee behavior that violates the article 16 in Company Law and cleared the validity of guarantee behavior in different situations. This part is the key part of the thesis and is divided into three situations. First, article 16 in Company Law stipulate that company regulation can determine the authority of external guarantee. When the authority of resolution is not consistent with the company regulations, it is needed to distinguish the validity of internal behaviors and external behaviors. It cannot claim the external guarantee contact invalid in the excuse of guarantee resolution violating the regulations. There is no validity involvement between the two. Second, when regulation did not rule the external guarantee, the shareholders meeting and board of directors has the resolutions. Third, the thesis analyzed the behavioral validity of senior executives’ ultra vires of external guarantee, such as legal representative, director or supervisor. Besides, this part affirm that legal representative has the right of external guarantee in principle and disclaim the guarantee authority of director or supervisor.The fourth part of the thesis based on the current situation of legislation and judicature in our country, the thesis hold the view that China should gradually universalize the affirmation of validity of company’s external guarantee step by step in many ways, which will provide the authority for judicial practice and defend the authority and unity of judicature.