Study On The Notice To Creditor Of Company's Capital Reduction

Registered capital subscription system has greatly improved the efficiency of capital utilization,effectively promoted the development of Socialist market economy,no doubt better to adapt to the "mass entrepreneurship,mass innovation" needs of the Times.Because it has given the investor the broad free space,the capricious contribution and the willful reduction question appears frequently,which caused the massive dispute and lots of risks.On the one hand,capital reduction is an act of selfmanagement of a company in the course of its operations,which involves the vital interests of the company and its shareholders;On the other hand,capital reduction results in a reduction of the company's credit capital and failure to perform or properly perform the obligation to notify creditors,may infringe upon the rights and interests of creditors.Because of the imperfect capital reduction system in our country,especially the lack of legal consequence of defective capital reduction,the contradiction caused by capital reduction becomes more and more prominent.Paragraph 2 of Article 177 of the Company Law of China makes it clear that "notice to creditor" is the legal obligation of the company,however,due to the nature of the company as a legal person,it can't act on its own and must be carried out by natural persons on its behalf.Therefore,the shareholders,directors and other senior managers who have close relationship with the company bear certain responsibility for the performance of the obligation of "notice to creditor".From a legal perspective,the meaning of "notice to creditor" is relatively vague,"how to notice","who notice" and "notice whom" issues need to be explained.Academic research and judicial practice,there are differences.Compared with foreign legislation,it is not the same.The uncertainty of the legal consequences of violating the obligation of "notice to creditor" has caused a series of complicated problems.First,the issue of the effectiveness of company's resolution and conduct of capital reduction is involved.No matter the academic research of scholars or the practice of judges,most of them hold that "reducing capital without informing the creditor" has no effect on the effectiveness of the resolution,the conduct of capital reduction is not automatically invalid.Because negating the effect of company' resolution and conduct of capital reduction is not in line with the company's operating interests and is not necessarily the most favorable choice for creditors.Second,it involves the creditor's right to the company.The creditor has the right to require the company to pay off the debt or provide corresponding security,but it should be subject to the necessary restrictions to prevent infringement of the company and other related interests.it is not wise for the creditor who is notified to rely on the way to protect his own legal rights and interests by bringing the lawsuit of Defective Capital Reduction Resolution or the lawsuit of Invalid Conduct of Capital Reduction.First,the creditor is not the proper party to the lawsuit of invalidation and cancellation of the capital reduction resolution;Second,When the resolution of capital reduction is lack of elements of establishment,the creditor may sue,but it is impossible to guarantee that individual claims can be fully paid or secured,and it is necessary to consider all creditors can be paid fairly;Once again,From the point of view of practice,although the court accepts the claim of the conduct of capital reduction is invalid,but does not support it,which obviously has no practical significance.Therefore,the company's capital reduction rules alone can't provide adequate protection for creditors,according to the theory of creditor's rights and tort,the creditor can defend his own legal rights and interests by bringing "suit of breach of contract" or "suit of torts".At last,it involves the creditor's right of claim to the shareholders,directors and other senior managers of the company.Due to the relativity of debt,the object of the "suit for breach of contract" can't cover the shareholders,directors and other senior management personnel,but the theory of "the third party encroaches on the creditor's rights" has sufficient practice foundation in our country,which can bring the shareholders,directors and other senior managers into the legal relationship of the company's capital reduction,and provide more sufficient protection for the creditor.and the protection of creditors seems to be inadequate,but this problem can be well solved by introducing the theory of "the third party infringing creditor's Rights".On the assumption of responsibility for tort,due to the sequence of "Supplementary Compensation Liability",it actually increases the time cost of realizing creditor's rights,which is unreasonable,appropriate changes should be made in the system so that shareholders,directors and senior managers bear joint and several liability within the scope of capital reduction by shareholders.In conclusion,in order to better control the opportunistic behavior of the company and its shareholders,and to balance the interests of senior management personnel such as the company,shareholders,directors and creditors,we should make clear the way of informing creditors of capital reduction and the legal consequence of not informing creditors of capital reduction so as to meet the actual needs of the development of Socialist market economy and the construction of social credit system.