Research On The Structural Reform Of The Legal Form Of Chinese Company

The article 2 of Company Law of the People’s Republic of China(1993)regulates that “for the purposes of the law,the term ‘companies’ refers to limited liability companies and companies limited by shares established within the territory of China pursuant to the law.”From then on,China has been using this sort of classification which is based on the legal form of companies.According to this sort of classification,the companies in China are belonged to two different categories: one category is the limited liability company,another is the company limited by shares.The classification inherits the tradition of Continental law system,but it abandons some legal forms of companies,such as joint liability companies,joint-stock limited companies,and unlimited liability companies.The limited liability companies and companies limited by shares both contribute to the dual structure system of companies’ legal forms.At first,scholars believe that the dual structure system is a good choice,since the two sorts of companies are classified by the number of shareholders,scales,constraints on transfer of shares and whether the capital is limited by shares.Obviously,the classification is so concise.It’s convenient for investors to make a choice.But the Company Law(1993),especially the dual structure system,is the product of time.It serves the reform of state-owned enterprises to a great degree.Nowadays,the reform of state-owned enterprises has been finished.With the development of global trading and economic globalization,many multinational companies are springing up.it’s very urge for Company Law to promote the modernization of companies.Only in this way can we improve the competitive power of Chinese companies and integrate Company Law of China with the world.The Company Law(1993)was perfected by four amendments(1999,2004,2005,2014).They strengthened the protection of shareholders and creditors.Besides,they complied with the development of market economy and economic globalization.But the amendments didn’t change structural matters——the legal forms of Companies,which hinders the modernization of Company Law.There are many consequent problems: the lack of substantial standard of classification,the sameness of legal forms of companies,and the vague boundary between limited liability company and closed companies limited by shares.The problems above discount the effect of the law and waste legislative resources.Faced with the structural flaws of legal forms of companies,there are 3 different claims on Company Law reform :1、Incorporate companies limited by shares established by ways of promotion into limited liability companies.2、Incorporate limited liability companies into companies limited by shares.3、Keep the legal form of limited liability companies and subdivide companies limited by shares.The claims above both have advantages and disadvantages.This paper tries to offer new thought on reform of legal forms of companies rather than focus on the revise of articles.The writer will study the legal forms of companies(the classification,the problem and the path of reform)by Logical analysis method and comparative analysis method,and provide specific suggestions and institution design for the reform.