Research On Application Of Judicial Dissolution Of A Company

The judicial dissolution system was increased in the Company Law of the People’s Republic of China(hereinafter referred to as the Company Law) in 2005.China’s judicial dissolution system is established in the case that the company deadlock is urgently needed to be solved in juridical practice, so China’s judicial dissolution system is expressed with obvious company deadlock feature. The application conditions for the judicial dissolution system are expressed abstractly and generally, so that the judicator is difficult to determine whether each condition is met,in which, it is difficult to determine the condition of “serious difficulty in the company operation management”. If the judicator has different focuses in understanding of this condition, the condition determination results are different. The Supreme People’s Court promulgated the Provisions of the Supreme People’s Court on Several Issues of Application of the “Company Law of the People’s Republic of China”(II)(hereinafter referred to as “the Act explained two”) in 2008, refined the“serious difficulty in the company operation management” through “enumeration and generalization” and clarified the circumstances in which the court shall accept the juridical dissolution cases. Nevertheless, there are still disputes in the understanding of “serious difficulty in the company operation management” in the juridical practice and the core is whether the company business difficulty is deemed as a necessary condition for dissolution or only the condition that the company characters based on shareholders are destroyed and the company governance is subject to internal obstacle is met. In 2012, the Supreme People’s Court published the guidance case 8 to judge dissolution of a company in profitable state and denied the opinion of considering the company profit status as the basis for dissolution in the form of guidance case.Through the opinions reflected in the guidance case, the author has some thoughts on the judicial dissolution system: first, subject of right of claim of company judicial dissolution. The author believes that the limited liability company and the company limited by shares have different equity dispersion degrees, so the same restricted condition shall not be used for the right of claim of the shareholders in the twocompanies for judicial dissolution; meanwhile, according to the foreign instances of legislation, it is recommended to increase the company creditors, supervisors and independent directors as the subject of right of claim. Second, the author comprehends the serious difficulty in operation management combined with the laws and judicial cases and believes that it should be required to determine the condition in terms of whether the company characters based on shareholders are lost, whether the mechanism in the company is functioning normally and whether the shareholder benefits are damaged. Third, the company law stipulates “failure to solve through other ways”. The author, combined with the case, proposes that this condition is not equal to “failure to solve through all other ways”. Moreover, the judicial intervention way and other judicial intervention means shall be increased in Chinese legislation to give full play to judicial activism to resolve the company contradictions, so that the company is exempted from solving company deadlock through dissolution. The relief range of the company’s juridical dissolution system shall not be limited to the company deadlock and shall be expanded to shareholder oppression and other problems to give full play to the judicial dissolution system.