Research On The Introduction Of Solvency Test In Corporate Law Refor

The core opinion of this paper is the introduction of solvency test into the Company Law.Company Law is facing a new round of reform.Whether to further modify the company’s capital system is one of the focuses of the reform.In the process of amending the company law over the years,the reform direction includes reducing the threshold for the establishment of companies,such as canceling the minimum capital limit for the establishment of general companies,relaxing the form of capital contribution of shareholders,etc.,but it rarely involves the reform of the back-end outflow rules of capital.In 2018,the company’s share repurchase rules were revised,the situation of the company’s share repurchase was expanded,and the company’s share repurchase procedures were revised.Under specific circumstances,the board of directors can decide to repurchase shares,which is a major reform of the capital outflow rules.The demonstration structure of this paper is as follows.The first chapter introduces the evolution and disputes of the company’s capital system.Firstly,it introduces the changes related to the company’s capital system in the company law,analyzes the trend of reform,and then introduces the rules restricting the company’s distribution in the company law,that is,the relevant provisions of the principle of capital maintenance.The second section analyzes some disputes existing in China’s corporate capital system,including mismatching with the capital front-end rules,inconsistent internal system of rules,imperfect accountability mechanism,excessive procedural burden and so on.The second chapter first compares the similarities and differences between the solvency test and the capital maintenance principle.The regulatory basis,regulatory methods and rights and responsibilities of the two are different,but they are similar in the property recovery mechanism.Then it explains the significance of introducing the solvency test,which is in line with the trend of the reform of the company’s capital system and enhances the creditor protection function of the company system,it can improve the corporate governance mechanism.The third chapter introduces the development of solvency test.The solvency test in American law is based on the unified distribution concept.Specifically,the behavior of the company’s capital reduction,share repurchase and profit distribution to shareholders,which leads to the flow of company assets to shareholders,is uniformly defined as distribution,and unified standards are adopted for regulation.The solvency test mainly includes several parts.First,the company’s short-term solvency test,which measures whether the company can repay the company’s due debts,including contingent debts and expected debts,in the process of operation.The second is the balance sheet test,which measures whether the company’s assets and liabilities meet the specified proportion.Third,capital adequacy test.The solvency test is not a pure accounting judgment,and there is no designated accounting standard.It is enough to measure the company’s assets in a fair and reasonable way.It is the directors who decide whether the company can make distribution.The directors should obtain sufficient information,especially the information about the company’s financial and operating conditions,make business judgment,issue a statement of solvency,and bear personal responsibility for the distribution of the company.Many countries and regions have introduced the solvency test when revising the Company Law.One way of introduction is comprehensive introduction,which adopts solvency test to regulate the capital outflow of all companies,and abandons the application of capital maintenance principle.The other way is compromise introduction,which refers to limiting the type of company or limiting the scope of application and introducing the solvency test standard.The company has the characteristics of unified distribution standard and distribution flexibility.The last chapter discusses the relevant system of solvency test.When reforming the company’s capital system,it is suggested to uniformly apply the standard of solvency test to the company’s capital reduction,profit distribution and share repurchase,so as to promote the transformation from capital credit to asset credit and form a system of capital rules.At the same time,we need to pay attention to the improvement of supporting rules,such as information disclosure system,protection of creditors’ litigation rights,recovery of improper distribution and so on.At the same time,the fiduciary duty of directors shall be strengthened,and it shall be clearly stipulated that when making decisions,directors shall obtain sufficient and reasonable information as far as possible to evaluate the financial situation of the company and whether the distribution will affect the operation of the company.A statement of solvency shall be issued at the time of distribution,indicating the reasonable basis for decision-making and subject to the approval of the shareholders’ meeting,Directors who agree to the company’s distribution shall be responsible for improper distribution.