Research On The Effect Of Company Guarantee Contract

In today’s world, the development of Chinese economic is facing manyprominent problems, among them, the small and medium-sized enterprise financing isthe most prominent and difficult. And at the same time, the one fits the pattern ofcommodity economy system under the condition is vividly portrayed,that is, theguarantee system of the company. Its utility is maximized under the condition ofmarket economic, mainly embodied in the following several main aspects: First is asolid guarantee for the realization of the bonds, which reduces the credit risk, enhancethe company’s credit in the bond market; Second is due its solid guarantee, itenhances the mutual trust between the companies,which promotes the opening of thecapital and commodity circulation channels,eventually achieve the prosperity ofsocial economy. External guarantees relateto three main body of benefit: securedcreditors, the guarantor companies, shareholders, its effectiveness will effect theresponsibilities of the parties and the company’s operating costs, meanwhile, it willdirectly impacts on the risk prevention and control. But legal norms in our country toset up the guarantee system of the company are too simple and general, in1993, theCompany Law only made a prohibitive provisions for the directors and managers’improper guarantee behavior, and did not make any rules for the company’s externalguarantees of due process exactly,which resulted in many disputes between theoryand practice.In2005, the company law have made breakthroughs on companyexternal guarantees system, it abolished the company law(1993) under article6paragraph3of the regulation. And use the article16as the core to the company forothers to provide security for ordinary decision-making mechanism, decision-makingprocess, when the company for its shareholders or actual controllers provide thespecial requirements of guarantee in connection and the listed company in the specialprocedure when a major security resolution matters such as standardization are putforward.Still not perfect, the company law did not involve the guarantee contract’seffectiveness that signed violate the regulations, increases the uncertainty of dealingwith guaranty company disputes, which caused controversy in the theoretical circle in our country, and at the same time, practical case that the referee is differ, which alsoharmed the interests of creditors, the guarantor companies and shareholders.In thepresent case, understand the article16’s purpose and specification of the companylaw(2005) correctly, abandon the wrong attitude to article16, as a effectiveness of thespecification of companies’ external guarantees, regard its as a standard to judge theother party in good faith or not, to decide whether the unauthorized guaranteebehavior of legal generation effect on the company or not is a solution on theeffectiveness of contracts that guarantees outside.The company law(2005) has a great breakthrough compares the1993’ on theaspect of the set of the company guaranty system, but some problems still existbetween theory and practice. Whether the effectiveness of article16of the companylaw is Arbitrariness or mandatory, is the administrative compulsory standard orineffective mandatory specification? The company violates the provisions of theguarantee to others will produce what kind of consequences, is it valid, invalid orwith pending validity?Through the analysis of article16of the company law on its nature and purpose,we can find that the rules are not discern the the effectiveness of companies’guarantee.The company in violation of regulations to sign guarantee contract is a kindof behavior that the legal representative over-rides so that we know the theeffectiveness of the actions through the analysis of the goodwill of the other party.So how should we tell the other party of goodwill or not?By analyzing interests’confliction between the internal staff and the company to show the necessity of thelegal representative’s behavior and the legal person’s behavior. And points out that todistinguish the standard of the other party in good faith or not is that when the legalrepresentative signs a contract, the other party knows or should know its beyond thescope of authorization. Company law, article16states the power of the ownershipand operation procedures of company guarantee. It is one to determine the obligationof the other party. the problem after the obligation of the other party is how the otherparty to fulfill its obligations to meet the criteria of goodwill, the review involved thatbefore the other party accept the guarantee, one should review the content andstandards of the content, whether is a form of censorship or substantial examination. On the base of determining the review obligation and its application of the otherparty. We discuss several negative aspects that influence the contracts’ effectiveness.1.Sign the guaranty contract when the company provides a decision with defects, theformal examination and the effectiveness of the contract should be influenced. Weresearch the formal examination and the effectiveness of the content from two aspects:flaws in content and procedural flaws.2. The other party how to deal with this: whenit finds that the company’s articles do not involve details that the company providesguarantee. Under this circumstance, whether the company have the right to provideguarantee for others, and if it has, the other party should review the resolutions of theboards or of the shareholders’ or of the shareholders’ meeting.