Research On The Effectiveness Of Company’s External Security

Nowadays, with the continuous development of market economy, company’s external security in the commercial transactions is extremely common. Company’s external security refers to the company with its own credit or property to guarantee other’s debt. Due to the representation of Company Law Article 16 on the company’s external security is too simple, the behavior of company’s external guarantee in real life is very non-standard, not only causing extensive discussions in academic circles, but also resulting in inconsistence of the justice. In this paper, based on Company Law Article 16, the author wants to make a research and analysis on the validity of the company’s external security in violation of the articles of association. The author tries to explore a basic route, in order to resolve differences in theory and problems of practice.This paper is divided into four chapters, as follows: the First Chapter is type of company in violation of external security; the Second Chapter is position of the justice on breach of the articles of association; the Third Chapter is rethinking about the company’s external security in violation of articles of association; the Fourth Chapter is the identification of basic route about the effectiveness of company’s external security in violation.The First Chapter is type of company in violation of external security. This chapter is divided into two sections: Section I is the classification about the company’s external security in violation of articles of association. Section II is the four kinds of theories on the company’s external security, and the author gives a simple comment on the theories.The Second Chapter is position of the justice on breach of the articles of association. This chapter is called case study which is focusing on three cases. There are highly instructive cases which are judged by the Supreme Court, Supreme People’s Court. Changes in justice are very important, which represent its view and attitude.The Third Chapter is rethinking about the company’s external security in violation of articles of association. This chapter focuses on three controversial issues:(a) whether Company Law Article 16 belongs to the "effect of peremptory norm" or a "management of peremptory norm" in nature;(b) whether the articles of association shall have the effect against a third person, and the presumption third person knew or should have known of the matters described in the articles of association, and then against a third person;(c) whether the third party shall have the obligation of review. If the requirements of the third party to assume an objective review obligations, then the scope of the review should be how to define, and what criteria should be defined with reference to the obligation to review the third party.The Fourth Chapter is the identification of basic route about the effectiveness of company’s external security. The theory and justice of the basic route are mainly discussed in this chapter. The two combined are helpful to width of the basic route.This paper aims to discuss and analyze the things above, and achieve the purpose to help the future development of the theory and practice. In this paper, the author is in favor of the Supreme Court on the company’s external security in violation of the articles of association.