A Study On The Substantive Examination Standards For Related Party Transactions That Damage The Interests Of The Company

As a conflict of interest transaction that only reflects the will of the strong party,related party transaction itself contains the seeds of inequality.China's company law has been constantly improving the rule system of related party transactions,with the intention to protect the interests of the company,minority shareholders and creditors through legal means,but there are still problems of imperfect legal norms.Interpretation(V)of the company law stipulates that the court must conduct substantive review on connected transactions before judging their legitimacy.Although this provision unifies the judgment caliber,the review standard is not clear.In practice,the court is gradually forming a relatively complete set of substantive examination standards.The trial of the court basically focuses on judging whether the connected transactions are fair.The fiduciary obligation of the controller to the company is the source of other obligations of the controller.The court often makes a comprehensive demonstration on this basis,combined with whether the controller makes correct information disclosure to the company,whether the meaning made by the company is true and whether the transaction consideration is fair.The above four points are not completely separated in form,but interrelated and mutually confirmed.Among them,the investigation of whether the controller violates the fiduciary duty is in the backbone.To understand the fairness of related party transactions,we should pay attention not to excessively interfere with the internal governance of the company,and we must properly balance the relationship between transaction fairness and autonomy of will.