Research On Lex Societatis

A legal persons has its personal law which governs general questions.The personal law of a legal person which is also known as lex societatis is the law governing the formation and existence of a legal person as well as the rights,capacity and internal affairs of it.There are great differences in the provisions on general issues of legal persons in different countries.With the development of international trade,the multinational operation of legal persons becomes more and more frequent,and the legal conflicts on general issues of legal persons also increase gradually.Within the scope of private international law,there are mainly two different theories as to which law governs the personal law of legal persons,namely,the theory of incorporation and the theory of real seat.The rules of lex societatis of our country is in article 14 of the Law on Choice of Laws for Foreign-related Civil Relationships of the People’s Republic of China.The scope of the clause and the application of the connecting points order should be further clarified.Therefore,it is necessary to sort out,analyze and study the contents of the rules of lex societatis,and put forward improving suggestions.In addition to the introduction and conclusion,the main body of this thesis is composed of four chapters.Chapter I: General issues of lex societatis.Firstly,the research begins with the historical investigation of lex societatis and related concepts.Based on sorting out the beginning of the concept of lex personalis and the emergence of the concept of legal person,combined with the views put forward by scholars,this paper defines the meaning of lex societatis,namely the law governing the establishment and dissolution of the legal person,the right and capacity of legal person,and the relations inter se shareholders,directors and the legal person.Secondly,starting from the general structure of the conflict rules,the research scope of the rules of lex societatis is divided into three parts,which are the research on the connection points,the research on the scope of the legal person’s personal law and the research on the optimization of the structure of the legal person’s personal law.It should be illustrated that although the relevant conflict law rules of a very few countries,such as Switzerland,are based on companies rather than legal persons,the majority of countries still regulate the problem with legal persons as the subject.Since the basis of the research on the personal law of a company is still the characteristics of company as a legal person,the research on lex societatis should still focus on legal person rather than company.Thirdly,in order to further clarify the research scope,the author analyzes the relationship between the nationality,domicile,residence of legal person and lex societatis.Finally,by analyzing the change of the justice value of conflict of laws,the paper summarizes the entity orientation in the justice value of conflict of laws.The purpose of conflict law is related to the corresponding substantive law.The judgment and design of rule of lex societatis should be based on the realization of conflict of justice and relevant values of legal person organizational law such as company law.Chapter two: The dispute of the connection factor of lex societatis.As for the connection factors that should be chosen for the rule of lex societatis,there are mainly disputes between the incorporation theory and the real seat theory.The incorporation theory holds that the general problems of legal persons should be governed by the law of place of incorporation,while the real seat theory holds that the general problems of legal person should be adjusted by the law of the place where the legal person real seats.The common law countries follow the theory of incorporation,while most of the civil law countries choose the real seat theory.This chapter mainly analyzes the historical evolution of rules and the current rules embodied in the two different theories represented by the United States and the continental law system countries in Europe.The United States,as a representative country that adopts the incorporation theory in the provisions of lex societatis,applies the law of place of incorporation to the establishment and dissolution of legal persons and the relationship between legal persons and shareholders,directors and senior managers.Also the United States divide the scope of rule of lex societatis into two parts.The law of place of incorporation applies to the absoluteness of the content of legal personality such as the establishment and dissolution of a legal person,while in order to prevent the negative effects of pseudo-foreign companies,the United States still leaves open the possibility of applying other,more closely related laws to the internal affairs of legal persons.Germany,France and other civil law countries adopt the real seat theory.With the development of European integration process and the requirement of free entablement of companies,the continental law system countries in Europe gradually abandoned the real seat theory on the recognition issue of legal person.Anyway the real seat theory has not gone away.Relevant countries still apply the real seat theory when judging the person law of legal persons from non-EU member states,and the European Court of Justice has repeatedly made clear in its judgments that the relevant provisions of freedom of establishment itself do not directly affect the conflict law rules of member states.Both the incorporation theory and the real seat theory have their own advantages and disadvantages.Generally speaking,the incorporation theory is conducive to the certainty,predictability and consistency of the application of law,and in most cases,the place of the incorporation of a legal person has the most significant relationship with the legal person.The application of the real seat theory is more conducive to the protection of the interests of creditors and minority shareholders.From the legislative experience of various countries in the world and the developing trend of the world economic integration,it is the future development direction of legislation to integrate the two theories.With the theory of autonomy of private law becoming more and more clear in company law and the trend of assimilation in the company law of countries,the appropriateness of adopting the incorporation theory in lex societatis is increasing.The focus of the integration should be to apply the laws of the place of real seat in a specific scope while comprehensively applying the laws of the place of incorporation in lex societatis.Chapter three: The debate on the scope of lex societatis.First of all,based on the viewpoints of famous scholars and the legislative experience of various countries,the main normative scope of lex societatis includes three aspects: the determination of the qualification the organizational structure of legal person,internal affairs of legal person and the rights and obligations of shareholders.Secondly,due to the complexity of the legal person organic law itself,the differences of national legislation and the diversity of the multinational operation,there are some special and exceptional rules of lex societatis in many countries.Through the summary and analysis,the special matter that should be included in the scope of lex societatis is the name of and branches of legal person.Since foreign legal persons mainly operate in the host country by setting up branches in the host country,the regulation of branches of foreign legal persons in various countries is an important part of the company law.Only by applying the law of the place of establishment of branches can the supervision of branches in the host country be further strengthened.Issues of securities,bankruptcy of legal person,denial of legal person personality should not be included in the scope of lex socitatis.Thirdly,many countries have set up some special exception clauses for lex socitatis,including the exception based on the domestic law,the exception based on the law of the place of conduct,the exception based on the counterparty with good faith and the exception based on the principle of the most significant relationship.This kind of special exception clause is beneficial to protect the interests of creditors and shareholders of the country and to realize the substantive justice of conflict law.Chapter four: The present situation,problems and perfection of the rule of lex societatis in China.First of all,although article 14 of the Law on Choice of Laws for Foreign-related civil Relationships has been more improved than before,there are still some problems such as too general application scope,unclear interpretation of connection factors.Therefore,there are corresponding differences in the application of this article in judicial practice.To be specific,there are mainly the following problems.First,in terms of the scope of application,there is a problem of inconsistent in the application of law for cases of the same type.Secondly,there is a discrepancy in the interpretation of the connecting factor of "main place of business".Thirdly,in the application of the connecting factors,the main business place is always been used.Fourthly,there are some divergences on the application of this clause to the disputes of foreign-invested companies,equity transfer contracts and piercing the veil of corporation.In order to promote the healthy development of transnational economic exchanges and the unification of judicial application,combined with the analysis in the preceding chapter,it is suggested that the place of incorporation should be clearly defined as the general connecting factor in the rule of lex societatis,and the main place of business should be applied to the internal affairs of the legal person only when the legal person’s main place of business is inconsistent with the place of incorporation.The main place of business of a legal person shall be the place where its main and daily office is located.The internal affairs of a legal person shall include the authority of the legal representative,the rights and obligations of the legal person shareholders and so on.Secondly,for the legal person branch,it is suggested to apply the law of the establishment of the branch.Finally,it is suggested that an exception clause based on the law of the place of conduct should be set for the representation right and limit of legal persons,that is,a legal person should not claim that the representative act is invalid because there is no prescribed limitation of representative in the place of the representative act.