Studies On The Contribution To Capital Of Stock-limited Company

From the middle of 19^th century, the doctrine of standardization in the formationof a company and limited liability of shareholders emerged in the stock-limitedcompany law, which encouraged formation of many new companies and enhancedeconomic development. However, the limited liability of contributor also rises manyproblems such as the deficiency of company capital endangering the interests of othershareholders and interested parties. Thus, company law in many countries has set upmechanisms to prevent these problems in advance and to deal with the aftermathsafterwards. These mechanisms differ in different countries, and some of them mayhave shortcomings.This paper first illustrates various legal systems dealing with this subject in thecomparison of China and Korea systems, and suggests that China adopt acompromised authorized capitalism which is in line with the rapid development ofChina economy. In order to prevent that the contribution in kind may endangercapital of the company, China should adopt the publicizing system in articles ofcorporations and applications for shares, property receiving system,formation-afterwards system. As for the liability of incorporators and othercontributors, this paper holds that China should perfect its system in reference toKorean system. Moreover, pointed out some problems about the rectification draft ofthe Company Law of the People's Republic of China by the State Council, Dec.2004.When name-borrower under the promise of name-borrowee uses the name ofname-borrowee and subscribes shares, the title of shareholder will be under question.General viewpoint in Korea is that in that case the name-borrower is the shareholder,but this paper puts forward a solution that the stock transfer books should have theeffect of publicizing but not have the effect of public trust. This solution will help inprotecting safety of trade and the interests of real shareholders.Fake contribution is a universal problem both in China and Korea. Throughanalyses of cases, theories and problems in safety of trade in China and Korea, thepaper draws a conclusion that fake contribution is a fraud in which the fakecontributor has no intention of contribution and its effect should not be admitted.As to the subjects of contribution in kind, China company law has a closed list.Through analyses of practices, theories and evolving process in Korea, Japan andwestern countries, and also having the rapid development of China economy in mind,this paper believes that this list should be enlarged by legislations enacted byauthorized legislative institutions. In addition, this paper corrects somemisunderstandings of relevant systems in civil law countries such as the prohibitionof debt contribution.It is a difficult task to evaluate subjects of contribution in kind, and it isinevitable to avoid subjectivity and randomicity in the evaluation. Through analysesof evaluation methods in company law and accounting law, this paper sums up thatthe evaluation of subjects of contribution in kind doesn't have to be as accurate as innatural science, we could find solutions by methods in merchant law and accountinglaw and the mechanism of market automatic adjusting, and the difficulties inevaluation should not be obstacles to contribution in kind.