Study On The Validity Of Inter-enterprise Loan Contracts

Inter-enterprise loan is a form of private financing, which is conductive to short term funding gap of enterprises, especially the financing difficulties of SMEs. Our law and judicial practice always hold negative stance to the validity of inter-enterprise loan contracts. Faced with quantities of inter-enterprise loan, judicial legislation and financial management department should change the inherent thinking and incorporate inter-enterprise loan into legitimate category. Meanwhile relevant departments should provide positive guide and regulation so that they can play a useful role.In addition to the introduction and conclusion, this article is divided into three chapters.Chapter 1 is about the law and the judicial status of inter-enterprise loan contract. In Section 1, this article describes the definition of inter-enterprise loan contracts in detail and clears the scope of study according to related studies. As well, this study summarizes three characteristics of inter-enterprise loan contracts distinguished from formal financial and private lending loan contracts, that is, specificity of contract subject, high degree of autonomy of contracts and diversity of contracts. Section 2 is divided into three stages including the 1980 s, the 1990 s and years after 2000 chronologically. In this part, laws on inter-enterprise loan contract are sorted during different periods of China mainland. Section 3 is mainly about introduction and review of three typical legislation patterns, which contain the laissez-faire model of USA, doctrines of limitation mode of Germany and prohibit plus exceptions mode of Taiwan, China. Section 4 summarizes judicial practice of inter-enterprise loan in China. Inter-enterprise loan contracts involve not only direct loan contracts, but also numerous forms. As for inter-enterprise loan contracts, the judgment of the court is not uniform such as identification of the validity of the contract, valid reasons, the use of sanctions and balance of the interests of the clients.Chapter 2 describes the stance to the validity of inter-enterprise loan contracts. In Section 1, the validity of inter-enterprise loan contracts is analyzed at legal level. First of all, inter-enterprise loan contracts do not belong to the void contract as the Article 52 of Contract Law stipulates, since they neither violate the mandatory provisions of laws and administrative regulations of China nor the public interest. Furthermore, it is unreasonable to classify that as legal form to conceal illegal. Secondly, it is consistent with principles of the Civil Law to authorize the validity of inter-enterprise loan contracts. Finally, the validity of inter-enterprise loan contracts is supported by relevant laws. Section 2 analyzes the validity of inter-enterprise loan contracts at socio-economic level. Approval of inter-enterprise loan will not benefit financing environment of small business but reduce risk of capital market. Moreover, that can enhance self-management of enterprises and get rid of the monopoly of financial institutions.Chapter 3 is about legalization means of inter-enterprise loan contracts. Section 1 describes some opinions on improving regulations of inter-enterprise loan. It is necessary to amend General Rules for Loans, Company Law and some relevant judicial interpretations. Section 2 elaborates on specification limits of system design on inter-enterprise loan. Inter-enterprise loan should be limited to non-profit civil loan. The lending funds of enterprises should be limited to discretionary funds. It is necessary to develop regulations on amount of inter-enterprise loan, term and interest rates.