On The Definition Of The Subject Scope Of The Company’s Liquidation Obligor

After the company is disbanded,it cannot automatically enter the liquidation procedure,and there is a gap between the company’s dissolution and liquidation,which needs to be connected through the liquidation obligor system.The liquidation obligor system is a unique creation of China’s legislation.It is different from the liquidator systems of other countries.The liquidation obligor is also different from the liquidator.The liquidation obligor is the organizer of the liquidation affairs,and the liquidator is the executor of the liquidation affairs.Clearly defining the subject scope of the company’s liquidation obligor is the premise and foundation for the liquidation procedure to be carried out in a timely manner,but the provisions of the “General Principles of Civil Law”on the subject scope of the legal person’s liquidation obligor are not completely consistent with the “Judicial Interpretation of Company Law（Ⅱ）”,which is likely to cause difficulties in applying the law in practice.Moreover,the subject scope of the liquidation obligor determined by judicial interpretation is unreasonable,and the discussion in this thesis is also based on this.First of all,the "Judicial Interpretation of Company Law（Ⅱ）" distinguishes the type of company to define the subject scope of the liquidation obligor is unreasonable.There are disadvantages that the same kinds of liquidation obligors are treated differently.On the one hand,China’s division of corporate legal forms has not reached a high degree of differentiation,especially for large limited liability companies and unlisted companies limited by shares,there is no substantial difference between the two.On the other hand,whether the company’s shareholders can participate in management is not necessarily related to the type of company.Under the current system,it is neither fair nor necessary to define the subject scope of the liquidation obligor by distinguishing the type of company.The main body scope of the liquidation obligor of limited liability companies and companies limited by shares should be unified.The use of company shareholders as liquidation obligors has led to many problems in practice,such as "professional creditors" buy the debts of "zombie companies" at low prices to obtain profiteering through litigation,shareholders’ responsibilities are too heavy,and the role of directors as liquidation obligors is ignored,etc.In fact,shareholders are unreasonable as liquidation obligors.The reason is that shareholders do not participate in the company’s operations and management,and they do not have the authority to keep corporation’s property,books and important documents,and there is a conflict of interest between shareholders and creditors in liquidation.Judicial interpretation treats shareholders as the company’s liquidation obligor,mainly due to the influence of the protection of creditors ’interests at that time,the misunderstanding of the effectiveness of the company’s dissolution,the misunderstanding of Article 183 of the “Company Law”and the errors in the legal transplantation of relevant legislation in Taiwan.Finally,drawing on foreign legislation,most other countries have chosen directors to bear the statutory liquidation obligations and start the liquidation procedures.The position of director is not dismissed due to the dissolution of the company.Therefore,the directors ’liquidation obligations are a natural extension of their fiduciary duties.Moreover,the beneficiary of the director ’s fiduciary duty in liquidation may be a creditor,so it is beneficial for the director to assume the liquidation obligation to achieve a balance between the protection of creditors ’interests and the protection of shareholders’ interests.At the same time,the modern corporate governance structure has gradually evolved from“the shareholder’ s meeting-centered structure” to “the director board-centered structure”.Directors are suitable candidates for liquidation obligations based on their powers to control the company’s operations and management,information superiority they possess,the number,and qualifications for holding positions.As a liquidation obligor,the director has both reasonableness and necessity,and also complies with the principle provisions of the “General Provisions of Civil Law” on legal person liquidation obligor.Therefore,china’s company law should clearly stipulate that the director is the liquidation obligor of the company,free the shareholders from the liquidation obligation,and on this basis,further improve the liquidation obligor system and build a scientific and proper market exit mechanism.