Limits Of State Intervention On Corporate Autonomy

The limits of state intervention on corporate autonomy, which means to set legalboundaries and limits to make the country "stop here" and be no further intervention.This paper attempts to demonstrate: in modern China, the State powers shall complywith the provisions and spirit of the Constitution, and shall respect the agreement andCertificate of Incorporation（Articles of Incorporation）, to control state intervention tominimum on corporate autonomy. Minimal state intervention, which can be reasonablyinferred from the process of constitutional interpretation. Minimum state interventionis consistent with the value of efficiency, human freedom and liberation, in the spirit ofConstitution. Minimum intervention limits are not uniform substantive standards, butlegal procedural standards. Administrative powers should comply with the principle ofminimum intervention which is prescribed by the Constitution on corporate autonomy,to limit excessive administrative intervention by administrative procedures. Thejudicial powers should also comply with the principle of minimum intervention whichis prescribed by the Constitution, based on the “Prinzip der Privatautonomie”(principle of private autonomy), only to review the company’s affairs in form.Corporate affairs should base on Certificate of Incorporation and valid agreements inshareholders and investors in entity. It should not be reviewed by judicial powers ifArticles have no agreement, even if the Corporate Law or the relevant legal provisionshave regulations in entity.This paper based on the following logic:The first chapter explores the theoretical origins and value of corporate autonomy,by briefly reviewing the changes of market economy theory, and the concept ofprinciple of private autonomy. The market economy theory has experienced a changeand development of general equilibrium theory, market failure theory, and intervention theory. The development of principle of private autonomy changes fromindividual-based to community-based process. We found that: the theory of corporateautonomy is a natural extension of market economic theory and principle of privateautonomy. Corporate autonomy has a Series of independent values: the ability toenhance social vitality and efficiency, to achieve human liberation and freedom. Thestate-owned corporation’s autonomy contains some special value: the promotion ofstate-owned corporation’s competitiveness and economic democracy.The second chapter compares the world’s typical mode of state intervention oncorporate autonomy, then summarized its characteristics. We found: Compared withthe other countries, the United Kingdom and the United States advocate of privateproperty Protecting, freedom of citizens. Therefore, the company is generallyconsidered the property of all shareholders. Due to the factors of full protection of thestrongest philosophical individualism, protection of freedom for business men, theAnglo-American contribution to national economic construction, the limits of stateintervention in these countries are usually kept in minimum range. The corporation isrelatively free and has larger autonomous space. Civil law countries tend to restrictcorporate autonomy in the form of national legislation to protect the corporationstakeholders. Civil law countries generally believe that the corporation does not onlybelong to the company shareholders, but belongs to all the interests of shareholders,managers, workers, creditors, banks and other stakeholders of the corporation. Thisassumption makes the civil law countries tend to limit shareholders’ rights to restrictthe corporation to make any behavior. Therefore intervention in Civil law countrieswere relatively more than the Anglo-American countries. Soviet Union tend to besuper state intervention, corporations enjoy little autonomy space. Soviet Unionfollowed planned economy approach, to direct the production and management ofcorporation, in the form of production scheduling and planning. We do not believe thatthe Soviet Union enterprises typical corporation in sense. Soviet enterprises have toobey orders, in accordance with the national plan for production management andother features. In fact, these features is quite different from the modern corporateVI system, like private own property, premise of free will, self-determination andself-governance. Of course, from the perspective of state intervention in the economy,corporate behavior intervention, we still get a lot of enlightenment from the Sovietmodel.reasoning from meaning of constitutional provisions, combined with theamendment of the Constitution, the spirit of major decision after the conferences ofCommunist Party of China, the third chapter analyzes and demonstrates legality baseof minimum state intervention on corporate autonomy, explaining that the limits ofstate intervention in corporate autonomy should stay and limited state intervention inthe minimum and maximum space of corporate autonomy. It is even more critical thatthe minimum state intervention is not the principle standard of certain or entity, but aruled and procedural standard. Therefore, the core part of the third chapter states howto set a standard of procedure, to limit state intervention and be more effective,actionable.The fourth chapter discusses the limits between administrative intervention andcorporate autonomy. This chapter tries to prove: the executive shall abide by theConstitution, and intervene corporate autonomy in minimum. Minimum limits ofintervention refers to limits and scale of the Constitution and its spiritual essence thatexecutive should obey in intervention on corporate affairs. If there is no authorizationfrom Constitution, the executive shall not to intervene corporate autonomy.Administrative organ should demonstrate legitimacy of intervene through initiative,open, due process. Untenable administrative intervention can not be implemented.Chapter IV respectively, prove these point from: the purpose of administrativeintervention (basic theory limits); excessive administrative intervention in three forms(command, helping, appointment and removal); the procedural standard ofadministrative intervention.Fifth chapter discusses the relationship between judicial intervention andcorporate autonomy. This chapter views that: the judiciary should abide by theConstitution, intervene corporate autonomy in minimum. The minimum limits of intervention refers to: the judiciary should judge the corporation’s affairs so as not tojeopardize the corporation’s Articles and any other conventions and contracts. If thereis no agreement or Articles between the private ones, Judiciary shall not carry out anyentity referee to corporate affairs even if the Corporation Law or the relevantprovisions of the law has ruled. Judicial review about referee disputes involving thecorporation should be limited in the form of process, and only according to Articles asthe sole criterion.Finally, according to the main points of each chapter, draw a brief conclusion: thestate should intervene corporate autonomy in minimum, and minimum standard is aprocedural standard.