Research On Legal Issues Of Chinese Companies' Capital Reduction

Capital reduction is always a kind of unpopular topic both in theoretical and practical field.However,corporations will confront the issues of capital reduction inevitably in the process of their establishment and development.As the continuous development of Chinese capital market and the constant variation of the concept of capital system,the traditional view of capital credit is questioned.Some scholars consider that it is farfetched that regarding the registered capital as the most important symbol of the company solvency after the implement of subscription capital system.On the contrary,the public have showed more attention to assets credit.Unfortunately,the provisions of capital reduction have no substantial changes with rough and simple clauses lacking of operation after two extensive reforms of Company Law of China.There are two kinds of conflicts of interest in disputes of capital reduction including the conflicts between the shareholders and the conflicts between the shareholders and the creditors.The first kind of conflicts mainly exsit under the resolution of shaeholder committee of reducing capital because the inherent defects of the voting rights of the shareholders easily breeds unfair phenomenons;the creditors tend to focus more on the issure that if the shareholders have the priority right to be repaid than the creditors in the process of capital reduction.Therefore,the author put forward the resolvents and make pertinent suggestions through researchingrelevent typical cases in recent two years with empirical analysis method.The thesis divides into four chapters.The author first divides the contradictions of capital reduction into the conflicts of interest between the shareholders and the creditors and the shareholders themselves.Using the methods of empirical analysis and comparative analysis,the author tries to analyze and evaluate the two types of contradictions according to the principle of interest balance in the company law,which points out the legal problems of the reduction of capital.In terms of the conflicts between the shareholders,the conflicts between controlling shareholders and minority shareholders and the conflicts between preferred shareholders and common shareholders are worthy of attention.For the conflict of interests between the shareholders and the creditors,unjust solutions for the three conditions including the uselessness of creditor protection procedure,the acknowledgement on lawful effectiveness of capital reduction and the predicament of legal consequences in the process of capital reduction.Secondly,the author analyzes the three capital reduction modes and the weakening of the view of capital credit to conceive the structure of the capital reduction mode at this stage which draws a conclusion that we should combine the mode of creditor protection under information disclosure with solvency model in China.The last part of this paper puts forward the perfection of the legal problems of Chinese companies' capital reduction according to the existing problems.The author first suggests that the stage of shareholders' committee should be designed to maintainthe substantive fair.Then,from the angle of creditor protection procedures,the author make suggestions in three aspects including capital reduction notice,guarantee and the censorship of business registration.In terms of the regulations of capital reduction effectiveness and the regulations of the consequences,the author puts forward the view that the effectiveness and the consequences should be analyzedaccording to different circumstances.The author finally points out that the reduction of the companies' capital reduction dispute needs the perfection ofcompany information disclosure system and corporate credit legal system.The author believes that,whether it is based on the weakening of the current concept of capital credit,or based on the various difficulties arising from judicial practice,a legislative perfection of the legal mechanism of Chinese companies' capital reduction is urgently needed to adapt and cooperate with the development of Chinese current capital market to effectively balance the parties between the interests.