Analysis Of Cross-shareholding Among Company

Simply to say, cross-shareholding is the mutual investment among various companies. The legislation regarding to it originated from the United States, followed by the developed capitalist countries which had begun to set up relevant legislation according to their own national conditions. That is because the impact to the economy brought by the cross-shareholding should not be underestimated. On the one hand, it has the effects to operate a stable company and reduce transaction costs etc.. On the other hand, it also has lots of strikingly negative impact on economic development. Given to the relatively short history of China’s corporate restructuring, the performance of cross-shareholding is still not very prominent. Therefore not too much academia paid attention to the research of this area, especially on legislation. Combined with the current situation and development of the legislative status of cross-shareholding, I put forward some legislative proposals on cross-shareholding of china.This paper is divided into five parts:The first chapter analyzes the concept and types of cross-shareholding and through discussing the relations between company investment, related companies and cross-shareholding, determines the object of this research.The second chapter analyzes favorable and unfavorable impacts of cross-shareholding to economic development, in order to make clear the necessity of legislation. Its economic functions include a stable economic operation of the company, reducing transaction costs and increasing capital accumulation and strengthening the power of the managers, the drawbacks such as inflating the company’s capital, undermining the company’s governance structure, easy to form monopolies and hindering the healthy operation of the security market.The third chapter studies the common law countries and civil law countries on legislation of cross-shareholding, mainly discussing the situation of cross-shareholding legislation of the United States, England, Germany, Japan and France. And most of these countries developed different rules on cross-shareholding in accordance with their national legislation characteristics.The fourth chapter focuses on performance and legislative history as well as current status of cross-shareholding in China. Particularly, I pointed out the legislative attitude reflected from amendment to "Company Law" legislation and explained defects of cross-shareholdings legislation.The final chapter presents some legislative proposals, including prohibiting subsidiaries hold shares in the parent company, limiting the exercise of the right to vote of cross-shareholding parties and requesting shareholding parties to timely disclosure information, finally the construction of supporting systems such as the need to strengthen the supervision of all aspects, further improve China’s anti-monopoly law.