The Research Of Legal Status Of Companies During Their Establishing Period

Corporation is one of the most important parts in modern economy development. It’s necessary for China to standardize corporate system during its rapid economy development.It could be deducted from the new version of ‘Corporation Law’ that issued in 2013, China has lessened the requirements for setting up a company which means the government greatly encouraging the establishment of new companies.In the previous version of ‘Company Law’, a company could only be established after the procedure of registration. This registration procedure was aimed to ensure the enough capital of the company and thus protecting the transaction safety in the market. But in the new version of ‘Company Law’, the registration procedure has lost its original purpose and may be abandoned by the law in the future.At the present stage, one company’s capacity as a subject is still begun to exist when it has completed the registration theoretically. The company will be gained its status as a legal person when its information is recorded on the register. However, what could not be denied is that every company in reality is established in a long period instead of one moment. In the writer’s opinion, the company’s status as a legal person is gained step by step during its pre-incorporation period Different from the previous theory regarding that the things entrepreneurs do during the establishment process as the quantitative changes of a company before its qualitative change: achieving the status of a legal person, the writer considers that the qualitative change should be advanced in one company’s pre-incorporation period.Lots of cases indicated that one company in its process of establishment has already had some legal relationships with others as a legally independent subject in Chinese legal practice. Among these cases, some legal relationships were judged as valid while others were invalid. If the attention is still not be paid to legal subjects which are possibly appeared in the setting up process of a company in theory, legal practice would be lack of supporting references in these kinds of cases which would lead to chaos in judgments.Analyzing the pre-incorporation process of a company carefully, it could be discovered that the action of setting up a company is mainly depending on two documents: the promoters’ agreement and the corporate charter. In this article, the writer will discuss the nature of both promoters’ agreement and corporate charter and come to the conclusion that the status of a legal person of a company exists at the moment of the appearance of corporate charter which means after the completion of the corporate charter, the ‘Company Law’ is suitable to this setting up company. The writer thinks promotes’ agreement is a temporary partners’ agreement while corporate charter is the conclusion of the regulations applicable to the whole corporate. When the corporate charter exists, the company has showed its basic characteristics and appears to be a respective subject out of its shareholders. But in Chinese Company Law, an incorporated company has its own special characteristic since it not having its independent status of a legal person.