The Reform Of The Theory Of Minimum Registered Capital System Of Our Country Company

In the previous years,the Chinese Corporate Law stipulated clearly on the matter of the legal capital of corporations,and the institution of legal capital,which served as one of the major corporate institutions,formed the logical presumption for the independent legal personality of the corporations.The relevant decisions made on the State Council executive meeting lifted the minimum amount of the legal capital and provided for that the newly-established corporations would be no longer liable for actual payment of legal capital within a fixed period set up by the government.The Chinese corporate system is now being transformed from a legal capital based system to an authorized capital based system.Furthermore,the amendments to Corporate Law w also passed in the National People's Congress.This transformation marks a milestone for the development of Chinese economy,causing great favors out of expectation to the entrepreneurs of small-sized or medium-sized firms and novice entrepreneurs.The majority of scholars also highly agree with such transformation.The positive aspects of this transformation are that the conditions for market entrance are lowered,the markets are made more open and motivated,and the economic efficiency is thus greatly improved.At the same time,there also arise some negative aspects,as the enterprises are no longer guaranteed with their own assets,and the enterprises newly created are no longer under certain criteria for their entrance into the market.In such a circumstance all enterprises,covering those highly credible or least credible,all enter into the market,leaving great risks for the interests of the creditors.The first part of this dissertation will briefly introduce the concepts of authorized capital and minimum legal capital.Through the introduction of the contents of the relevant decisions which are made on the conferences of the State Council,this dissertation analyzes the transformation process of the enactment of the former and current Chinese Corporate Law.This dissertation aims to reflect the phenomena that the Chinese Corporate Law constantly lowered the minimum requisite amount for the legal capital and gradually loosen the requirements for opening a business,and to reveal the profound causes of this reformation,proving the necessity and urgency for such reformation which lifts the system of minimum legal capital in order to boost the economic development.The second part of this dissertation is focused on the transformation process of the legal capital institutions adopted by UK,the rest of European countries,Japan,and the United States,based on the background studies of the fact that most of the countries transformed their system with respect to corporate capital at registration from legal capital system to the authorized capital system which is mainly adopted in the common law countries,such as UK and the United States.The author studies the causes of the reforms of capital institutions and compares the systems of different countries to find out their respective advantages.This dissertation finds out the authorized capital system(and relevant judicial cases)adopted in the United States and other common law countries features its sophisticated credit system,flexible and subtle case law rules,more free and more developed market-oriented economy.China comprises an important part of world economic cooperation and is supposed to carefully study the systems and cases of the foresaid countries to better catch up with the trend of the world's corporate law development.The third part of this dissertation combines the present situations of China to deeply analyze the adverse and positive effects which arises out of the gradual abolishment of the system of legal capital in China.On one hand,the reformation will loosen the conditions set up for the entrance of the market entities into the market,thus stimulating the incentives of the people to create more enterprises,reducing people's reliance on the legal capital and also reducing the number of phenomena of crimes with respect to legal capital fraud described and defined in the Criminal Law.Through such reformation,people will pay more more attention to the fundamental form of credibility-the capital-based credibility and work hard to build a better credibility system.On the other hand,due to the immature market system,it is difficult for the legal remedy mechanisms to be employed and there appear to be more briefcase companies which actually only exist on paper without any actual business activities,causing irregularity of the market and high-risk transactions.It also appears to be a very urgent issue that how to regulate the one-person LLC while the foundation for its existence has disappeared as it previously adopted its capital as a guarantee a separation between its legal personality and the owner's personality.Besides,it is widely observed that it is much more difficult for the public check the credibility information with respect to a specific company,making the interests of the creditors still at risks and without effective protection.Considering all the issues and questions mentioned above,the fouth party serves as solution and analysis of relevant issues,by giving a series of useful suggestions.At first,the author suggests that the government should launch a governmental platform to release the relevant information concerning the credibility of companies,which enables the society to discover,and avoid the harms caused by,the briefcase companies and enterprises with extremely low credibility.Secondly,the author suggests that the approach of piercing the corporate veils should be perfected and a useful and long-term mechanism which enables essential remedies shall be launched;and at the same time,the construction of service-oriented government must be handled and the government should shift its role from a supervisor which functions after the offenses or violations occur to a administrator which is engaged in avoiding such offenses or violations of law.The government should push forward the construction of the enterprise credibility system.Finally,the legislative acts,combined with other acts,should be perfected to reflect the goal to perfect the corporate legal framework,including the systems in the fields of legislation,jurisdiction and administration.The parties also can freely agree to determine their relevant liabilities and rights,to effectively substitute the function of previously widely accepted legal capital system,to improve the vigor and efficiency of the economy,and furthermore,to better guarantee the interests of creditors as well and transactional safety.