Study On The Effectiveness Of Defective Capital Reduction

As a civil subject,a company can reduce its registered capital independently.As the legislation of capital reduction is relatively simple and vague,there are more and more disputes about capital reduction in judicial practice,especially those related to defective capital reduction.Among them,the cases related to the company’s defective capital reduction that did not fulfill the obligation of notifying creditors occupy the vast majority.There is a great controversy on the validity of the defective capital reduction from the perspective of judicial judgment and academic theory.It is urgent to make a rational analysis on the validity of the defective capital reduction of the company in order to have reference value for judicial practice.In order to explore the problems of the effectiveness of reducing capital by corporate defects in judicial practice,a lot of case search and research are needed.First of all,this paper summarizes the three judicial status quo of the disputes over defective capital reduction in China.The main behavior of defective capital reduction is that the company fails to fulfill its obligation of notice,the basis of judgment is diversified,and the court of defective capital reduction does not find it invalid.The second section sorts out the general characteristics of the disputes about the company’s defective capital reduction.The third section is the focus of the first chapter,combing the judgment reasons of the effectiveness of the company’s defect capital reduction disputes.It is divided into two parts: one is the reason for the court to judge the relatively invalid cases,which mainly includes the following three points: capital reduction is essentially an internal act of the company,notice to creditors is a non effective element of confrontation,177 non effective mandatory provisions of the company law;the other is the reason for the court to judge the invalid cases,which mainly includes the following three points: learn from the foreign provisions on the invalidity of capital reduction,notice The creditor is a necessary condition for the effective reduction of capital and there is a risk that the creditor’s rights cannot be paid off.However,almost all of the courts adjudicate that shareholders are liable for supplementary compensation,whether it is the relative invalidity or invalidity of the defective capital reduction.The second chapter analyzes the different viewpoints of the effect of reducing capital from the theoretical circle.First of all,it combs the views of scholars on the effectiveness of capital reduction due to corporate defects,mainly divided into the following three kinds of Views: relative invalidity,invalidity and revocability,and combs the reasons of scholars supporting these three kinds of views respectively.Scholars who support the theory of relative ineffectiveness expound their reasons from three aspects: focusing on the principle of efficiency and proportion,protecting the interests of creditors and damaging the rights and interests of specific creditors.The scholars who support the theory of invalidity think that it is necessary for the company to implement the procedure of notifying creditors,and the violation of mandatory provisions should be considered invalid,and the violation of social and public interests should be considered invalid.The scholars who support the theory of revocability believe that the reduction of capital due to corporate defects is a procedural defect that can be corrected.They can appeal to the court for revoking the reduction of capital.After a rational analysis of the arguments in the theoretical circle,the author believes that the theory of invalidity has a high degree of recognition,while the theory of relative invalidity and revocability has some defects.The third chapter,based on the experience of foreign countries,sorts out three kinds of effective modes of capital reduction: Germany,Japan and South Korea regard the creditor’s objection as the effective elements of capital reduction;the British court confirms capital reduction on the basis of the creditor’s consent;the United States takes the solvency as the capital reduction standard.In the fourth chapter,on the basis of the above analysis and demonstration,the author analyzes the validity of the company’s defect capital reduction.The author divides the effect of capital reduction into two types: formal capital reduction and substantial capital reduction.The former will come into effect when it is submitted to the industrial and commercial organ for change registration after the decision of capital reduction is made,and there is no need to perform the creditor objection procedure.The procedure of objection of the creditor should be the effective element of the substantial capital reduction,and some specific procedures of capital reduction should be specified to regulate.For example,in the resolution of capital reduction,the type and purpose of capital reduction should be specified,the creditors should be informed in a reasonable way,the main body of the creditors and the content of the substantial capital reduction should be specified.After the determination of the company’s defective capital reduction is invalid,the company’s registered capital should be restored to the state before the capital reduction,rather than the analogy of the provisions of withdrawing capital.