Study On The Corporation External Guaranty Problem

In the newly revised Company Law, company is not forbidden to provide guarantee for others at all, so the decision of providing guarantee for others has been returned to company itself. But the dispute over company’s guarantee isn’t completely solved though the revision of the company law.On the one hand, there is risk when company provide guarantee for others, and it will also have an influence on the interest of shareholders and creditors. On the other hand, corporation external guaranty problem is not just a problem of Company Law, but a problem of Contract Law and Guarantee Law。In terms of legislation, judicial or in theory, how to balance interests between different subjects is very important and difficult to solve the corporation external guaranty problem.The Company Law has been made a major revision in 2005. The provision concerning to corporation external guaranty problem is also changed, which is mainly reflected in the article 16 of 2005 Company Law. The article 16 of Company Law has made a significant progress comparing with the article 60 of 1993 Company Law.However, the amendment of the article 16 of Company Law don’t solve all the company external guaranty problem. Firstly, how to determine the guarantee organ when there is no provision concerning to the guarantee organ in articles of association? Secondly, whether the conduct of company guarantee is effective or not, when it’s violating the provisions of the articles of association, or the decision-making organ or the decision-making procedures violates Company Law in paragraphs 2 and 3 of article 16.It’s not properly to think that the shareholders’ meeting is the only organ which has the right to decide to provide guarantee for others when there is no provision concerning to the guarantee organ in articles of association only according to the shareholder meeting center doctrine. It’s better to determine the guarantee organ through the method of legal interpretation according to different situation when there is no provision concerning to the guarantee organ in articles of association. It’s also not properly to think that the unauthorized guaranty contract is null and void according to the paragraphs 5 of article 52 of Contract Law under the trend that the limitation of providing guarantee for others is gradually relaxed. Company guaranty problem is not just a question concerning to Company Law. It’s involved in the interpretation and application of the relevant rules of Company Law, Security Law and Contract Law. Therefore, the effectiveness of guaranty contract in violation of the relevant provisions shall not be determined from one angle. The secured creditor shall fulfill his responsible duty of care to refer to the articles of association and review formally the legality of the resolution files issued by decision-making body in the company, if not, the guaranty contract which is signed by the secured creditor is null and void.