Research On Creditor Protection Under The Capital Subscription System

The company's capital system is an important part of every country's commercial legal system.In 2013,the Company Law in China,which has been enforced for more than 20 years,made a comprehensive reform by way of introducing the Capital Subscription System,detailed measures including cancelling the minimum registered capital limit for the establishment of a company,abolishing restrictions on the payment deadline of shareholders' contributions,relaxing the form of capital contribution,and cancelling the procedures of capital verification.The Company Law of 2018 further expands the scope of share repurchase.The reform reduced the company's entry barriers,weakened administrative intervention,and gave companies more room for self-regulation and autonomy.However,the impact of the reform of the capital system is not limited to the system.Objectively,the creditor protection system closely related to the capital system should also make certain changes to maintain the balance between shareholders,creditors and the interests of company.However,the Company Law of 2013 did not make special provisions for the protection of creditors' interests,and even adversely affected the protection of creditors,including increasing the creditor's risk of compensation and increasing the transaction costs of creditors.At the same time,the research on the protection of creditors' interests plays an active role in improving corporate governance,and helps to enhance the company's competitiveness.The effective protection of its interests plays an important role in building a healthy and efficient market environment and fostering a culture of integrity-based market culture.Under the current corporate law framework,this paper divides the legislative loopholes and risks of creditor's interest protection into the following categories according to the way of creditor's interest damage: First,directly jeopardizes the creditor's risk of maturity,that is,when the company is unable to repay the debt.Under the circumstance,it is not clear whether the creditor can claim the repayment obligation to the shareholders of the company that has not fulfilled the performance period.Second,it risks indirectly the risk of the creditor's future interest,including the company's solvency accumulation caused by the rigidization of the dividend distribution standard.Weak and non-sustainable fraudulent transfer of the company caused improper damage to the company's assets.Third,the existing legal remedies were weak,mainly because the standard of direct remedies was vague,that is,the standard of “significant capital shortage” under the corporate personality denial system is unknown.Fourth,the company's information disclosure is insufficient,creditors have difficulty in accessing and the risk prevention ability is weak.Combining judicial practice with foreign legal experience,the author attempts to provide targeted paths to protect the interests of creditors from the following five aspects: Firstly,from the perspective of legislation,the law should clearly stipulate the acceleration of shareholders' capital contribution.If a company could not discharge debts,the relevant creditors would request the shareholders to pay the capital contribution in advance to repay the debt.Secondly,the law should optimize the dividend distribution standard by referring to "solvency analysis method".Thirdly,With reference to the US Uniform Invalid Transaction Act,the law should define and type the improper behavior of corporate assets,and then put forward some effective means of relief.Fourthly,the law should clarify the judgment criteria for the significant shortage of capital and distinguishing the applicable situation;Fifthly.the law should further strengthen the construction of company information disclosure system,by clearly stipulating the company creditors' certain access rights.In the above,the author thinks about the dilemma of creditor's interest protection from the aspects of interest damage and ineffective relief,and proposes specific systematic suggestions from the aspects of risk prevention,loophole filling and relief refinement.