The Realistic Dilemma Of My Country's Companies' Capital Reduction And Their Solutions

Capital reduction of a company means that a limited liability company or a joint stock limited company reduces the total amount of registered capital recorded in the articles of company association and registered with the administrative registration authority.Company's capital reduction often occurs in the process of the company's operation,and its impact is very extensive.First of all,from the internal point of view,the company's capital reduction will lead to changes in the proportion of equity among shareholders within the company,which will lead to changes in their rights and obligations;Secondly,from the external point of view,the company's capital reduction will reduce the company's responsible property and the company's solvency,and ultimately affect the rights of external creditors.Therefore,the capital reduction system is of great significance to shareholders,creditors and even the whole economic market.However,there are serious defects in the current system of capital reduction.At the normative level,the current norms of company's capital reduction in China are mainly concentrated in the Company Law and some administrative laws and department regulations,which are only a few.And many aspects are not perfect;At the practical level,with the vigorous development of market economy,the disputes related to company's capital reduction are more and more complicated.In the face of numerous and complicated cases of capital reduction disputes,judiciary authorities often have disputes in adjudication due to the lack of normative guidance,which makes it difficult to ensure justice.In addition,in 2013,China reformed the capital system of the company,which stipulated that the capital contribution was changed from the paid system to the subscribed system,reducing the restrictions on the capital contribution.However,this reform did not involve capital reduction at all,which makes the original imperfect capital reduction system increasingly unable to meet the needs of the current economic environment,and further aggravates the transaction risk of creditors.Therefore,the company's capital reduction system needs to be perfected.First of all,we should focus on the basic theory of the company's capital reduction system.In terms of the connotation of capital reduction,capital reduction in China should be defined as the act of reducing the total registered capital of the company;For the classification of the types of capital reduction,the distinction between substantial capital reduction and formal capital reduction is the most important;For the benefit and value measurement contained in the system of capital reduction,it mainly includes the value between shareholders,between shareholders and creditors,as well as the value of safety and efficiency.In the aspect of the legislative mode of capital reduction,we should keep the existing mode which includes ‘creditor protection under the information disclosure',and learn the good system designs of western countries from the ‘solvency standard mode' and the‘compromise mode under judicial intervention'.The research on the basic theory can lay the legal foundation for the company's capital reduction system and provide theoretical support for the improvement of the system.Secondly,through the analysis of the legal situation of the company's capital reduction system in China,there are many imperfections in the current legislation,including the unclear subject and object of notice and announcement obligation,the lack of the standard of the announcement,the fuzzy recognition in the effect of the defective capital reduction,and so on.From the judicial level,the number of company's capital reduction disputes in China is increasing year by year,and the appeal rate is high.The main disputes focus on the notice procedure and the responsibility of capital reduction.The research on the current legal situation is helpful to systematically summarizing the defects of the current company's capital reduction system,and point out the focus and direction for the improvement of the system.Furthermore,through a more in-depth and systematic review of China's current company's capital reduction system,five aspects need to be improved.The specific performance is as follows.Firstly,there are some deficiencies in the basic norms such as the reasons for capital reduction,the classification of capital reduction and the nature of the repayment commitment and guarantee statement made by shareholders;Secondly,there are some procedural problems such as the unclear subject and object of notice and announcement obligation,and the lack of announcement norms;Thirdly,there are some effect problems in the case of the company's capital reduction without notifying the creditors.In addition,in the aspect of capital reduction responsibility,the basis of responsibility identification is vague and the distribution method is unclear;Finally,in the aspect of creditor protection,there is a lack of remedy means for creditors and loose control on the company's information disclosure.This systematic summary and reflection can provide specific focus for the improvement of the system.Finally,the paper puts forward corresponding suggestions for the imperfections.First of all,in terms of basic norms,the causes and types of capital reduction of the company should be clearly defined by legislation,and the promise of repayment and guarantee should be defined as unilateral promise;In terms of procedural norms,the subject of the notice and announcement obligation should be identified as the directors and senior executives of the company,and the scope of the object of notice should be based on litigation and should include the contingent creditors.The content and the platform of the announcement should also make specific requirements;In terms of effectiveness identification,the procedure of notifying should be identified as an element of confrontation,which does not affect the effectiveness of the company's capital reduction behavior itself;In terms of capital reduction responsibility,the law of evading capital contribution and failing to fulfill the obligation of capital contribution should be applied by analogy.In terms of responsibility distribution,the shareholders should bear the supplementary compensation responsibility for the company,and the responsibility between the shareholders should be joint liability.In the aspect of creditor protection,the creditor should be given the right to stop the capital reduction and the right to defense capital reduction,and the information disclosure system of the company should be improved by strengthening the asset verification,strengthening the supervision of the company's procedures for notifying creditors,and building a public announcement platform.It is expected to improve the capital reduction system from the above five aspects,so as to improve the current realistic dilemma.