Study On Legal Regulation Of Business Activities During The Non-bankruptcy Liquidation

The non-bankruptcy liquidation system plays a key role in the formation of the normal exit mechanism of the company,and the business activities during the liquidation of the company are an important part of the liquidation of the company.The “Company Law of the People's Republic of China”(hereinafter referred to as the “Company Law”)stipulates that a company must not carry out business activities unrelated to liquidation during liquidation and must be warned and confiscated of the illegal incomes after carrying out business activities unrelated to liquidation.However,the “Company Law” imposes some principle clauses on the business activities during liquidation.The crudeness of the legislation has led to many bottlenecks in the legal regulation of business activities during the non-bankruptcy liquidation.The current company law stipulates that the company shall not carry out any business activities irrelevant to liquidation during the liquidation period from the 1993 “Company Law”.At that time,the company legislation stipulated that the original intention of the business activities unrelated to liquidation during the liquidation period of the company was mainly to emphasize state management.In order to maintain the security of market transactions,the company strictly controlled the business activities that had nothing to do with the liquidation,with a more obvious national standard.With the booming development of the market economy,this kind of rigid legislative concept,which is more than rigid and lacks flexibility,will present an imbalance between the two major value objectives of safeguarding transaction security and increasing market efficiency.Although the “Company Law” stipulates that during liquidation,the company may not carry out business activities unrelated to liquidation,it does not clarify the legal effects of the unrelated business activities of company and the civil liability for creditors' losses caused by the business activities that have nothing to do with the liquidation.The “Company Law”also stipulates that the company registration authority shall have the right to warn and confiscate the illegal income of the company in carrying out business activities unrelated to liquidation.When the business activities unrelated to liquidation are in the implementation stage,warning that such administrative responsibility for violating the offenders cannot achieve the effect of punishing the company.As for the administrative penalties for confiscation of the illegal incomes,after the dissolution of the company,liquidation is the main way to remedy and protect the interests of creditors.The property of the company in the liquidation is the only guarantee for the creditor of the company.The penalizing measures that confiscate the proceeds of the company in carrying out business activities unrelated to liquidation are likely to damage the interests of the creditors.Therefore,It is not legitimate for the current law to confiscate the property income obtained by the company in carrying out activities related to liquidation.Moreover,in the process of supervising the business activities unrelated to liquidation conducted by the company,the company registration authority showed the actual dilemma that the specific implementing agencies were not uniform and that the company registration authority was not effective in law enforcement.In order to reasonably and effectively regulate the business activities during the non-bankruptcy liquidation,first of all,the law should not sacrifice market economy efficiency because of excessive emphasis on transaction security,especially static transaction security.The value concept of regulation should return to focusing on improving market efficiency.At the same time,the interests of creditors,companies,and shareholders need to be balanced during the regulatory process.Secondly,judging the legal validity of business activities unrelated to liquidation,it is necessary to proceed from the “Company Law” to limit the business activities during the liquidation period in order to protect the interests of the creditors and make substantive judgments;If a company causes losses to a creditor by carrying out business activities that are not related to liquidation,it can be denied by the corporate personality that the shareholders should be jointly and severally liable for the debts of the company.Third,regarding the way the company undertakes responsibility for administrative responsibilities that are not related to liquidation,when business activities are at the stage of preparation,warnings against them can stop the company from conducting business activities.When the business activities are already in progress,the responsibility of ordering the immediate cessation of responsibility should be adopted;If the business activities have been implemented and gains have been obtained,the current law stipulates that the company will be confiscation of illegal income for the sake of safeguarding the static security of the creditor's interests.This may harm the interests of creditors and create counterproductive effects.The current “Company Law”should proceed from the emphasis on market efficiency and the value of the company's property,and protect the interest of companies,shareholders,and creditors in the liquidation to a greater degree,and cancel the administrative punishment imposed on companies for confiscation of illegal income.Or the “law” in the “Regulations on the Registration of Companies of the People's Republic of China”(hereinafter referred to as the “Regulations on the Administration of Company Registration”)stipulating “forfeiture of illegal income” refers only to “compulsory provisions for effectiveness”.Finally,regarding the administrative supervision of the company registration authority,the “Deepening Party and State Institutional Reform Plan” proposes the formation of the State Market Supervision and Administration Bureau.However,it is recommended that all localities set up the market main body supervision and management section or the enterprise supervision and management section in their internal agencies of the Market Supervision Administration to supervise activities of the company from establishment to termination.And in the process of law enforcement,the effectiveness of law enforcement has been strengthened from the sources of the case,investigation and evidence collection,and hearing procedures.