Research On The External Effect Of The Company's Defect Resolution

The external validity of defective resolution refers to the legal effect on the validity situation of legal act performed by the company and the counterpart which is based on the defective resolutions of the board of shareholders or the general meeting of shareholders and the board of directors;and the legal effect on any third party.From the perspective of judicial cases,there are three kinds of determination to the external effect of the non-existence resolutions in Chinese courts:firstly,none of the external effect absolutely;secondly,none of the external effect relatively;thirdly,existence of the external effect absolutely.The legal act related to the company's defective resolution should not be limited to the bilateral legal act,and also includes other types of the legal act which has a counterpart.The counterpart of the company's defective resolution includes the counterpart in a narrow sense and any third party stipulated by article 85 of the General Provisions of Civil Law and article 6 of the fourth judicial interpretation of Company Law.Under certain conditions,the company's defective resolution will produce "spillover effect"' which will have external effect beyond the juridical association itself.It's not essential for the formation of the external effect of the company's defective resolution with the form of judgments.There are three viewpoints on the legal effect of the company's defective resolution,such as none of the effect absolutely,unauthorized agency or representation,none of the effect relatively.The counterpart's goodness can repel the external effect of the company's defective resolution,and the judicial practice in our country extends the counterpart's examination duty from the definition of the counterpart's goodness above.Both South Korean Commercial Law and Japanese Company Law distinguish the external effect of defective resolution between the general meeting of shareholders and the board of directors.Both of them agree that defective resolution of the general meeting of shareholders in the form of the judgement has the effectiveness to any third party;even in principle has an absolute retroactive effect.In addition,South Korean Commercial Law stipulates that defective resolution of he board of directors in the form of the judgement doesn't have the effectiveness to any third party,but has a relative retroactivity.While Japanese Company Law stipulates that there is no need to file a lawsuit,neither is there has any corresponding revocation lawsuit.Therefore,it's hard to say that the defective resolution of the board of directors has the effectiveness to any third party,but still should approve its retroactivity.In order to perfect the external effect system of the company's defective resolution in our country,four suggestions are put forward as follows.Firstly,to distinguish between the external effect of the resolution of the board of shareholders or the general meeting of shareholders and the resolution of the board of directors after perfecting the division of resolution items of the board of shareholders or the general meeting of shareholders and the board of directors.Secondly,to add the regulations of the external validity of the non-established resolutions.Thirdly,to add the regulations of the counterpart's examination duty.Lastly,to add the regulations of the retroactivity and the effectiveness to any third party.