| As the core issue of directors’ duty of loyalty,self dealing aims to balance the conflict of interests between the company’s managers and the company.On the one hand,it is necessary to ensure that the company’s interests are not infringed,on the other hand,it is necessary to pursue the promotion of the company’s long-term value and maximize the company’s interests.The regulation of directors’ self trading in British and American company laws has generally undergone a shift from absolute prohibition to relative prohibition.The inspiration for the revision of China’s company law lies in that the issue of regulating directors’ self trading in China’s company law should not be whether to prohibit it,but how to regulate it and to what extent,Only in this way can we balance the dual legislative purposes of protecting the interests of the company from infringement and maximizing the interests of the company.The regulation of directors’ self trading must be combined with the actual situation of Chinese companies,and institutional regulation and balance should be carried out by constructing and improving the transaction form,transaction subject,transaction procedure,and legal consequences of directors’ self trading.The Company Law(Revised Draft)of 2021 made significant adjustments to the existing rules of directors’ self dealing,and the Company Law(Revised Draft)of2022 further improved the procedural rules of directors’ self dealing.Indirect forms of directors’ self trading,as a common form of trading in practice,cannot be relied upon in the current Company Law.Explicit legal provisions on directors’ indirect self trading can help clarify the boundaries between directors’ self trading and related party transactions,and improve the accuracy of legal application.In terms of the subject of directors’ self trading,the rationality of Article 183 of the "Company Law(Second Review of the Revised Draft)" regarding supervisors as the subject of directors’ self trading is worth discussing compared to Item 4,Paragraph 1,Article148 of the current "Company Law".The scope of related parties for directors’ indirect self dealing as stipulated in Article 183(2)of the "Company Law"(second draft of the revised draft)focuses on the definition of functionalism,and its specific application needs to be interpreted in an expanded manner based on actual situations.In the past,China’s "Company Law" only regulated directors’ self trading based on results and fairness,and it was difficult to ensure the realization of the company’s interests without procedural matters.Directors’ self trading behavior should be truthfully,accurately,fully,and timely reported to the company in advance to ensure that the company’s approval authority made decisions objectively and impartially,and meet the transaction fairness requirements through procedural rules.The approval authority for directors’ self trading should include the board of directors in addition to the shareholders’ meeting or shareholders’ meeting to ensure that the company can flexibly exercise the approval power.Ensure the fairness and fairness of transactions through the related director avoidance system.When there are less than three non related directors present,the matter should be submitted to the shareholders’ meeting or shareholders’ meeting for deliberation.The legal effect of directors’ self dealing in violation of legal procedures should be clarified through legislation,enabling the company to have the option of survival or abolition.Without the company’s consent or ratification,directors’ self dealing has no effect on the company,in order to balance the legislative purpose of protecting the company’s interests and maximizing the company’s interests.The legal consequences of a director’s self trading in violation of legal procedures.If the company makes a ratification,the director’s self trading is effective from the beginning and binding on both the director and the company;"If the company refuses to ratify or fails to express its ratification within the statutory time limit,the transaction shall have no effect on the company,and the directors shall return their property in accordance with the law.If any loss is caused to the company as a result,they shall also be liable for damages.". |
