Research On The Validity Of The Ultra Vires Company External Guarantee

The company provides external guarantees with its own property,which is the specific application of ordinary guarantees in the company's field.In the current period of diversified economic development,corporate guarantees,as a powerful letter-creating measure,have greatly promoted the integration of funds and economic development.At the same time,the corporate guarantees is not a day-to-day business operation of the company.It will increase the liabilities of the company and cause the detriment of the interest of related parties.Therefore,the legislation has always been cautious about it,and the illegal guarantees are even more harmful.The ultra vires guarantee is one of them.The so-called ultra vires guarantee refers to the act of the company's legal representative,actual controller,shareholder or other related person who,in violation of the company's wishes or without legal procedures,provides guarantees to itself or third parties in the name of the company.It not only involves the general rules of the contract law,the security law,and the general principles of the civil law,but also considers the nature of its acts as a commercial,taking into account the legislative intent of the company law.In addition,due to the decentralized and imperfect regulations on the company's ultra vires guarantee behavior,it also caused chaos on the system and blanks on the basis of legal interpretation and application.Finally,corporate guarantees are related to the balancing of multiple interests and involve a wide range of cases.The amount of the subject matter in practice is also relatively large.Therefore,whether the guarantee contract based on the ultra vires of the legal representative is valid or not,what path and thinking should be adopted to judge its effectiveness is a matter that has been debated in both academia and judicial practice.In view of this,this paper attempts to sort out the evolution of legislation on the effectiveness of ultra-guarantee contracts,academic viewpoints,and judging points of view.Then through the balance of interests,interpretation of legislative purposes and other methods to reflect on the existing rules and analysis,in order to reach an evaluation of the overriding guarantee contract The appropriate idea of effectiveness,and based on this idea put forward legislative proposals for improving the rule of validity of ultra-guarantee contracts.First of all,to sort out the legislative evolution of the system and to summarize the existing normative system is a preparatory work for studying a legal norm.Only by understanding the reason and existence of the system,the follow-up study can be based on evidence and can be traced.Therefore,in the first chapter of this article,we review and analyze the legislative evolution of the validity regulations of the ultra-guarantee contracts.Secondly,summarizing existing theories and adjudication rules is the premise of judging the adequacy of the existing rules.Only by summarizing the existing disparate viewpoints,can we on the basis of abandonment and improvement.For the rule of judging the effectiveness of ultra-guaranteed contracts,the theoretical perspectives are mixed,but they are all very similar.And it can be summarized as the company law path and the contract law path of effectiveness rules.The company law path directly uses the company law as the basis for judging the effectiveness of the guarantee contract,while the contract law path returns to the essence of the ultra-guarantee contract to consider the problem.Again,for the two paths used to evaluate the effectiveness of ultra-guaranteed contracts,the authors generally reflect on them and believe that both approaches have more or less problems.The first problem is that neither of the two paths is not appropriate for the functional orientation of company law.The company law path of the effectiveness rule directly regards the company law as the criterion of contract validity.The first mistake here is that when Article 16 is not a mandatory rule,it cannot be obtained.The inevitable conclusion of whether the contract is effective or not lies in the fact that the company law is regarded as the main body of the law,and its purpose should be to establish and maintain the legal status of the company as a commercial entity.External guarantees belong to the category of commercial activities,and adjustments are inappropriate.The validity of the contractual law approach only applies to the effectiveness of the general rules of the warrants,and completely nullifies the company law.This,in turn,confuses the two concepts of "internal rules" and"regulations of internal rules." The second problem is that the current evaluation on the effectiveness of ultra vires guarantee contracts is obsessed with the absolute application of the principle of commercial appearance.The balance of interests is seriously skewed toward creditors.This is unfounded,because on the one hand shareholders of the company,other creditors,and interests of the employees of the company also need to be protected.On the other hand,there is no evidence that the social welfare brought by the protection of creditors' interests will be relatively high.The third problem is that there is an omission in the legislation concerning the determination of relatives' goodwill and the judgment of the effectiveness of the contract against the person's non-goodwill.Finally,by summarizing and reflecting on the two evaluation paths for the effectiveness of ultra-guarantee contracts,the author believes that it is not advisable to use company law directly as a company law approach to the contract validity rules.The company law aims to regulate and manage the organization of the company.However,the company law cannot be completely overridden.Corporate guarantees and general guarantees are equal,because the other purpose of the company law is to protect the interests of the company and its stakeholders.Therefore,this article puts forward the path of contract law that should have conditional validity rules,and puts forward suggestions for the legal renewal of the company's overriding guarantee rules.In summary,the determination of the effectiveness of a company's ultra-guarantee contract cannot be separated from the nature of an unauthorised representation and the general rules of an overhead guarantee contract,nor can it ignore the particularity of the company as a subject of its actions.The interests of stakeholders such as creditors,company employees,etc.are taken into consideration,and at the same time,trade-offs must be made in the interests of efficiency,equality and fairness.In the future process of legal continuation of the company's ultra vigilant security rules,it shall be clearly stated that:First,the company's decision-making authority to provide guarantees externally is a necessary record of the company's articles of association.The company must specify in the articles of association that it is the board of directors and shareholders.If the shareholders' meeting is to make a resolution on external guarantees,it shall be decided by the shareholders' meeting or the general meeting of shareholders if there is no provision for the external guarantee;secondly,the counterparty receiving the company's guarantee shall bear the form of the company's articles of association providing guarantee and the resolutions of the shareholders' meeting,the shareholders' meeting or the board of directors.A review obligation that fails to perform the aforementioned review obligations cannot be considered as a "good faith person".Third,if the legal representative of the company does not provide a guarantee to the public without a proper resolution procedure,the relative can prove its goodwill,and the guarantee contract is correct.The company is effective;the counterparty cannot prove that it is good faith.Without the company's approval,the guarantee contract does not take effect for the company.The legal representative and the counterparty share the loss according to their fault.