An Analysis Of Think Small First In The Companies Act Of The UK

Current company forms include limited liability companies and joint stock limited companies in China.?Company Law in People‘s Republic of China? regulates different legal institutions and regulations for these three kinds of companies.However,whether this division is the only choice for the modern market economy remains a problem.This essay tends believe that small market entities,as the majority in the market,should get attention in terms of their legal status and special rules.Think Small First proposed by the company law of the United Kingdom,as well as its drafts and suggestions,discussed this point fortunately.Therefore,this essay wishes to start from Think Small First of the United Kingdom.After describing,understanding and evaluating this principle,this essay will propose some suggestions for the reform of Chinese company law.Think Small First of the United Kingdom suggests that legislature should devise the companies law,making the private company law rules as basis,and the public company law rules as exceptions,besides,small company shall have its independent rules under the framework of private companies.In essence,this principle includes three points.Firstly,Think Small First is innovating a new company law.Secondly,it is encouraging the separation of large company rules and small company rules.Thirdly,it is proposing self-regulating in the field of small companies.The reason and legitimacy of Think Small First are threefold.Firstly,market liberalism and practicality provide the ideological basis.Institution competition impels countries to change and innovate the current company form.Secondly,small companies are different from large ones in terms of production factors,core characteristics,social duties and legal rules.Lastly,the company itself is the most suitable entity to pursue the maximization of interests,therefore,the self-regulation idea is reasonable.Although Think Small First has its reasonableness and legitimacy,the application,in other words,the real rule in the company law of the United Kingdom is not very satisfying,such as abbreviated accounts rule and corporate governance rule.Reasons are probably as follows: Firstly,the 2006 company acts are divorced from the prior drafts and suggestions.Secondly,legislature is not well balancing the advantages and disadvantages of the rules.Thirdly,there are no independent small company regime,which makes the reform not very thorough.If we move to the local law,we can see that small market entities have big advantages in terms of quantity,flexibility and competitiveness,however,the developments are blocked as well.This essay believes that the block roots in the traditional division of company forms,namely,limited liability company,joint stock limited company and one-person company.This essay proposes some suggestions therefore.Firstly,we shall increase a new company form to break the tradition company division.Secondly,the criterion of the division shall be clear.Thirdly,the law shall deeply apply the self-regulation idea in the field of small company.Lastly,Chinese legislature could draw lessons from the United Kingdom in terms of the legislation technology before and after legislation.Think Small First of the United Kingdom has become a precedent for the modern company law.For us,the key procedure is increasing a conception,separating two kinds of companies and applying self-regulation ideas.The next problem for us to solve is how to devise the special and suitable rules for small companies.