Creditors Protection In The Affiliate Enterprises By The Company Law

The appearance of affiliated enterprises increases the risks of the investment by creditors of one enterprise, such as the creditors would feel difficult to estimate the credit of the enterprise because of the inveracious increasing of capital by the investment among certain enterprises and the unfair affiliated transactions among certain enterprises. And also, the affiliation and control existing in the affiliate enterprises seriously effect the expression of the independent purpose of the subordinative enterprises so that the subordinative enterprises cannot effectively control and manage their assets themselves. Consequently, the creditors' interests will be damaged, the safe social transactions will not be ensured and the social fiduciary will be seriously lacked. It perhaps may not be a single problem that one company benefits from it then one creditor loses his interests. It may bring the mess of the whole market and the breakdown of the credit system. So, it is necessary to update the legislation of affiliation enterprises to protect the creditors' legal rights and the safety of social transactions.This Article will step discuss how to protect the creditors' interests of the affiliation enterprises by operation of the Company Law step by step. In the first part, this article will give a definition of the connotation and scope of affiliation enterprises based on the reference of the foreign legislation or cases and will conclude the fourlegal characters of affiliation enterprises consequently. In the second part, this Article will briefly introduce the three traditional methods of the creditors protection of the company: obeying the company affairs open principle, carrying out the company capital principle and the executing the company liquidation. Then the impact of these three principles in the affiliation enterprises will be forwarded. In the third part, the foreign mature legislations and cases and their characters will be emphasized including particular legislations in Germany, "puncturing the veils" in Common Law and the revisions of affiliation enterprises legislation in Japan. In the last part, the legislation pattern suitable for our country's situations will be brought forward through analyzing the real systems and its shortages of the creditors protection in our country and referring the foreign mature legislations and cases. And to establish the actual protection system for the creditors in our country, it is necessary to strengthen the information open systems, to update the company capital systems, to confirm the duties of the company and its directors and to consummate the insolvency system of the affiliation enterprises.