Game Of The Powers And Checks And Balances

In this thesis, the author discusses mainly on the controlling power played by the parent company by economic, legal, comparativer and historical analysis method, analysis the conflict between the parent company and the subsidiary company, emphasis the company law should react with this phenomena to keep the balance of stakeholder within the group companys. Although the rapid development of group company in the recent 20 years in China, the parent(controlling) company falls in the legal dilemma. How should the parent company manage the subsidiary company within the lawful path? There is no way in the compny law. On the other hand, there are so many notorious cases of controlling shareholder abusing its controlling power in the subsidiary company. The author sums up the inherent economic and the legal resaon beneath the surface. The core point of view is that the company law should admit the controlling power neeeded by the parent company, provide a lawful path to regulate this "hand". Without the check blance, this "hand" tends to infringe the minority shareholders and the debtors. The Law should seek the appropriate equilibrium within the multi- stakeholders of group company. There are seven Chapters in this thesis: In Chapter one, the author firstly introduce the main problems brought by the group company, discribe the controlling power played by the parent company have challenged the traditonal laws that based on corporate entities and the limit liability. On the second section, through econominc analysis, proved that the existing controlling shareholders in the worldwide have the reasonable factors of economy. Then the author suggest that the law should base on the reality, provide the lawful path to regulate the controlling power by parent company, at the same time the law shouold seek the appropriate equilibrium within the multi-stakeholders of group company. Chapter two, explain the concept of conrolling power as well as the associate features of concern company and group, discuss the series of concepts around the "controll" that can be found in Western and Chinese laws. Chapter three, examine the recent situations on the controlling power of parent company, discuss the apporoaches of creating the parent/subsidiary company, select the classic examples of the controling power manipulated by parent company, analysis the conflicts and risks between the parent company and the subsidiary company. Chapter four, discribe the problem caused by sole majority shareholders, with acknowledging the inevitability controll of the majority sharehoplders, to rectify such abuses, suggest to develop the fiduciary duty for controlling shareholders, and discuss the specific institutions to guarantee its performance. Chapter five, observe the uneven role between the parent company and the minority shareholders in the subsidiary company. With particular reference to check the actions by parent company, provids for three manners to keep the balance of majority and the minority shareholders. First, establish the previous protecting rules,such as the full disclose of substancial controlling company; Second, emphasis specific rules to check the power while it is manipulating.Third, provide the rectified tools to reserve the balance of benefit. Chapter six, as for the parent company often interfere deeply into the bussiness of a subsidiary that debtors might not know the ture situation of the subsidiary. The majory protection provided in the western laws are as follows. One is direct liability may be inposed on the parent for the debt of its subsidiary. Two is credits of the parent maybe subordinated to other debtors. Three is the parent maybe required to compensate with the loss of the subsidiary. The author sum up the experience and give a detail research on this institutions. Chapter seven, through the comparative view, introuduce the main two method in the world about the legislation on the controlling company, examine the results of there rules. Then discuss the method that should take in China . The legis...