Research On The Legal Issues Of Company Set-up System Reform At China(shanghai) Free Trade Test Area

The founding of Shanghai Free Trade Area(FTA) brings a breath of fresh air to the innovation of Chinese legal system. It brings a fundamental change in commercial matter,the corporate capital system in company set-up system. Previously, Chinese Company law imposed capital system which is similar to the compromising authorized-capital system, that there is a minimum capital requirement, meanwhile introducing paid-up and installment payment system. On September 29, 2013, Shanghai FTA was officially opened. Shanghai FTA is implemented subscribed capital system, which the company can be without paid-in capital at the time of establishment, just need subscribed-capital and there is no minimum capital requirement. This is a big change in the law.Despite the Company Law China revised on March 2014 makes a major revision for the company set-up system and other related content, but there are still many aspects of conflict between the relevant provisions of Shanghai FTA and the new Company law. Because of this conflicting legislation, currently, many legal problems occurred in company set-up system reform. We need to conduct the necessary research to properly solve this problem.Like the company’s capital system reform of China, the company’s capital system of Japan also experienced the process from the paid-up system to the subscription system. Although there are significant differences in their economic environment, but they are civil law countries and they also have a number of similarities in legal concept, moreover complementarity is very strong. Therefore, in order to improve Chinese company set-up system, it has a very important significance to understand study and then learn from the Japanese experience in the relevant legislation.This paper is divided into four chapters:The first chapter is an overview of Shanghai FTA. First of all, give a general review of the process and the related regulations of establishing Shanghai FTA, then inspect the background(domestic situation and overseas situation) and the purpose of creating Shanghai FTA. Furthermore, introduce strategic planning of Shanghai FTA, specifically including the following four matters, that is, overall objectives, scope, major tasks and related measures.As far as the establishing Shanghai FTA, because of Shanghai FTA’s name, free trade can easily be amplified. But the purpose of the establishment of Shanghai FTA is more than promoting trade. The more important purpose is the transformation of government functions. This is the intention to establish a free trade zone in Shanghai. In other words, the called- name and its real content are not in full correspondence.The second chapter is discussion of the law issues of company establishment reform in Shanghai FTA. First, comparing the amended provisions related to the establishment of the company in the Company Law and the Shanghai FTA. Talk about the differences between the two, then overview two changes in company set-up system, which are the innovation of company registration system and the innovation of corporate capital system. At last, specify talk about the legal issue that existed in company establishment reform, which is the problem of transaction security. Because this is a big issue, it will directly refer to effective protection for creditors. Therefore, this paper will mainly focus on this issue.The third chapter is to compare the company establishment system of China and Japan. First of all, introduce the company set-up system in two legal systems, which are the official capital system of the civil law countries and the authorized capital system of common law countries. Although there are some differences between the two systems, but the company establishment system of the two legal systems has "compromise" trend, and strives to absorb each other’s advantages and overcome their own drawbacks.Furthermore, introduce and overview the changes and background of Japanese company set-up system. Japanese Company law references to German Law in early times, and then it changed significantly after strongly influenced by US law.Finally, start comparative study on company set-up system in China, Japan and Germany, clear similarities and differences between the three countries. After comparison between China and Japan, we can understand the company set-up system in Company Law of Japan is stricter and more reasonable than "Company Law" of China.The fourth chapter is about comparison of company set-up system between China and Japan, by which we can search and learn important lessons for seeking perfection in Chinese company set-up system reform from Japanese company set-up system. The company set-up system, in essence, is a sort of system which regulates the interests of subjects. The company set-up system reform in Shanghai FTA, considerably lower the threshold for registration of the company, which to some extent increase the risk for creditors to deal with a company. So, how to protect the creditors is a very important issue. It is the need to start the necessary research.The first part of the fourth chapter is the Japan-related legislation. Introduce the Japan’s main system of transaction risk prevention when creditors dealing with a company. These system include ① limit distribution of surplus, ② the doctrine of piercing the corporate veil, ③ enterprise information publicity system. Although there is no express provision of the doctrine of piercing the corporate veil in Japan, many precedents exist. So, here introduce and analyze two important cases, and then generalize, sort out the cases. And point out the latest cutting-edge hot issues among Japanese scholars.The second section of the fourth chapter is about the enterprise information publicity system. This is the most important system in Japan-related legislation. For this reason, distinguish it to be discussed separately. Firstly, explain the overview of Japan’s securities exchanges, then emphasize on the disclosure information of listed companies.The third section of the fourth chapter is about learning from the Japanese experience. As far as we should pay attention to the following four questions in seeking perfection in Chinese company set-up system reform, make specific comments and suggestions: ① perfect procedure of company establishment, ② limit distribution of surplus, ③improve the doctrine of piercing the corporate veil, ④improve enterprise information publicity system.Although a previous study has focused on information disclosure of listed companies, listed corporate scandals continue to occur on the 21 st century. In the case of this situation, the information disclosure of listed companies is more important. For this reason, it is necessary to resolve several practical cases of listed companies’ scandals, once again demonstrate the importance of information disclosure of listed companies. For its perfection, this paper will give a few suggestions on information disclosure of listed companies.