Study On The Unauthorized Guarantee Of The Company's Legal Representative

The guarantee system can promote the capital finance,commodity circulation,guarantee the realization of creditor's right,and plays an important role in the development of the socialist market economy.However,there are risks associated with guarantee.Once the debtor fails to pay off the due debt,the company that provides guarantee will assume the guarantee responsibility for this,which is likely to cause it to fall into huge debts and damage the interests of the company and shareholders.Therefore,due to the consideration of safety value,the corporate legal system of many countries and regions has imposed certain restrictions or prohibitions on the company's external guarantee behavior.Similarly,China's latest revision of the“Company Law” in 2018 follows the guarantees in the “Company Law” amended in2005,and has a restrictive open attitude towards the company's external guarantees,and incorporating the company's external guarantees into the scope of corporate autonomy,this is in line with the development law of modern market economy.However,the lack of the “legal consequences” elements in Article 16 of the current“Company Law” has resulted in the unclear legal consequences of the company's legal representative's unauthorized guarantee.Therefore,how to attribute the legal effect of the over-guarantee act,how effective the guarantee contract is,and what kind of responsibility the parties should bear is a matter of judicial practice and theexistence of differences in the academic world.It is also the three issues to be studied in this paper.This paper is divided into three chapters to analyze and explore the legal issues related to the company's legal representative's unauthorized guarantee,mainly studies the refereeing opinions of the Supreme People's Court on the issue in recent years and the various theories in the theoretical circles,sums up the focus of the dispute,analyzes the reasonable and unreasonable points,and puts forward the author's own analysis method and viewpoints,and use the basic principles of the civil law and related laws to propose solutions about the legal issues of the unauthorized guarantee of the company's legal representative.The first chapter of this paper analyzes the relevant background of the company's external guarantee and puts forward several major legal issues that will be solved in this paper.Through revising,the article 16 of the current Chinese "Company Law" has allowed the company to conduct external guarantee,but it has also imposed certain restrictions at the same time.Due to the lack of the "legal consequences" elements in Article 16 of the "Company Law",the effect of company's external guarantee behaviors is not clear,and there are many differences in judicial decisions.By enumerating and studying the recently relevant cases of the Chinese Supreme People's Court,this paper summarizes three different referee ideas for the unauthorized guarantee of the company's legal representative.The first kind of referee's idea is according to the relevant provisions of the “Contract Law” and the“Contract Law Interpretation” to judge the validity of the company's legal representative's ultra-authority guarantee contract based on the normative nature of Article 16 of the “Company Law”.The second referee's idea is to identify Article 16 of the “Company Law” as the procedural provisions of the company's internal management.It is considered that the provision has no external effect and cannot be used to bind the creditor.The guarantee contract will not be invalid because it violates this provision.The third way of adjudication is to introduce the relevant rules of representatives or agents in the civil law to deal with the relevant legal issues of the unauthorized guarantee of the company's legal representative.It is considered thatArticle 16 of the “Company Law” has externality.Whether the relationship of the guarantee contract between the company and the counterpart is established depends on whether the relative person is “good faith”.Only when the relative person is “good faith”,the act of the unauthorized representative of the company's legal representative can be considered valid,and the guarantee contract is valid for the company at this time.After studying the differences in the judicial judgment,the author continued to analyze the different analysis ideas of the theoretical circles on the issue of the company's legal representative over-authority guarantee.In general,there are two main analysis paths: the first analysis path is based on Article 52 Item 5 of the“Contract Law” and Article 14 of the “Interpretation of Contract Law(II)”,simply solve this problem from the normative nature of Article 16 of the “Company Law”.The focus of the dispute within this analysis path is whether Article 16 of the“Company Law” is an effective mandatory provision or an administrative mandatory provision.The second analysis path suppose that Article 16 of the “Company Law”only belongs to the procedural provisions governing the internal management of the company.The focus of the dispute within the analysis path is whether the regulation has external effect.In the article,the author analyzes the rationality and irrationality of various paths,supports the second analysis path,and believes that Article 16 of the“Company Law” has external effects.For the reasons,the author elaborates in the third section of the first chapter from the value measurement of the “Company Law”,the legislative purpose of Article 16 of the “Company Law”,and the matching of income and risk.The second chapter of this article mainly elaborates on the review obligations of creditor when the company's legal representative is over-authorized.There are theoretically different views on whether the creditor has a review obligation.Negative said that the creditor has no obligation to examine.For some reasons,some scholars have denied the externality of Article 16 of the “Company Law”,and some confuse the agreed restrictions and statutory restrictions on the right to represent,the public effect of the company charter and the law.The author's point of view is that the creditor has the obligation to review.In the article,the author elaborates on thereasons from the externality of Article 16 of the “Company Law”,the provisions of the law,the duty of care for cautious transactions in the commercial field,and the combination of Article 50 of the “Contract Law”.After determining that the creditor has a review obligation,the author immediately discusses the review criteria and specific content of the review obligation.For the review criteria,the theoretical circles are divided into two aspects: formal review and substantive review.Formal review only requires the creditor to examine whether the relevant materials meet the statutory requirements and whether the materials are complete,etc..Substantive review also requires reviewing the authenticity,legality and validity of the relevant materials on the basis of formal review.Because the criteria of substantive review are too strict,it often causes the review burden of the creditor to be too heavy,the cost of the review is huge,and even the situation that the review obligation cannot be effectively completed.Therefore,from the perspective of transaction security and efficiency,the author agrees with the formal review.For the specific content of the formal review,the author makes a detailed discussion on the different situations: non-associated guarantee,related guarantee and over-amount guarantee in the second chapter of the second chapter of this paper.The third chapter of this article mainly elaborates on the legal effect of the company's legal representative unauthorized guarantee.Most scholars do not elaborate on this issue in detail.Here,the author introduces Article 16 of the“Company Law” to Article 50 of the “Contract Law”,and combines the relevant theories of the apparent representative.The author supposes when the creditor performs its formal review obligation and belongs to the criteria for the determination of the “good faith” counterpart in Article 50 of the “Contract Law”,the unauthorized guarantee of the company's legal representative shall be become the apparent representative,and the legal effect of the guarantee contract shall be attributed to Company;when the creditor fails to perform its formal review obligation and does not belong to the “good faith” counterpart,the analogy applies the relevant rules of the unauthorized agent,giving the company the right to pursue.The company made a ratification,and the legal effect of the guarantee contract still belongs to the company;the company refuses to ratify or not ratify,and the legal effect of the guarantee contract does not belong to the company.For the specific responsibility of the company and legal representative and creditor,the author has discussed in detail in the second section of Chapter III in various specific situations.