A Research On The Company Judicial Dissolution System

The main duty of modern company is to guarantee the rights and benefits of small and medium-sized shareholders. And it is the general principle of company judicial dissolution legislation in almost all the market economic countries. The revised company law of the People'Republic of China, aiming at meeting the practical needs, has made the company judicial dissolution system clear. However, there are still come disadvantages resulting from insufficient theoretic study and legislative techniques. Therefore, it is of vital importance to refine the legislative system of company's judicial dissolution by reconstructing the entity law and procedure law.This thesis mainly focuses on the company's judicial dissolution system. Concretely, it consists of four parts:Part one expounds the definition, characteristic of legislative judicial dissolution and its differences from company deadlock or lawsuit proposed by the shareholder, which also defines the function of the legislative system of company's judicial dissolution. The writer holds the view that legislative judicial dissolution refers to the fact that because of some legal judicial dissolution reasons, the shareholder asks for the court's adjudication of judicial dissolution the company when their rights are damaged while other repairing measures lose effect. The following are the three main characteristics of the company's judicial dissolution: First, the implementation of the legislative judicial dissolution procedure is based on the application of the suitable party. Second, legislative judicial dissolution system is carried by the adjudication. As for the relations between company's deadlock, lawsuit and judicial dissolution through comparison and analyses, the writer draw the conclusion that the deadlock is the premise of the judicial dissolution, but the deadlock cannot constitutes the only reason for the judicial dissolution, which is not the best solution. judicial dissolution and action are two kinds of protective measures in order to redress the rights of the shareholder. Legislative judicial dissolution is the action proposed by the shareholder in his own name, aiming at protecting his own interest. So the subject lies in the shareholder. Whereas, the derived action of the shareholder is the action proposed by the shareholder in his own name to protect the whole interests of the company, the subject is the company. And the shareholder has no qualification to be the subject because he represent the company in this case. The adjudication result belongs to the company.Part two mainly compare and analyses foreign company legislative judicial dissolution system. Here, the writer focuses on four aspects: the order and court decision, the subject, the petition reason of the company judicial dissolution and protective measures of malicious litigation. On the basis of which, the writer explains the relevant regulations of the revised company law of our country.In part three, the writer, on the one hand, approves the importance and effects of the judicial dissolution system in the revised company law. And on the other hand, he also makes some comments on it. The Company Law is a breakthrough of the legislation since it is the first time that the judicial dissolution system is written in our law. However, there are some points waiting to be addressed such as lack of flexibility, too generalized, without concrete formalities, obscure definitions, etc; The writers also believes that the cognizance of the severe difficulties in the administration does not only limit to the company deadlock, its extension is beyond the deadlock, therefore, the legislation should have explicit definition of it. And there is no certain cause and effect as for the company's serious difficulties and its continuing survival. Only the combination of the two can be considered as the causation of the judicial dissolution. In addition, we should deepen our understanding of other solutions in the company law, which not only include the self-relief measures of the shareholder but also the public relief measures taken by the court in some degrees.We should notice that whether there are solutions is not the precondition for the judicial dissolution of a company. There is no necessary relation between the two. Furthermore, our company law lacks effective protective regulations as for the interests of the company creditor.Part four is the center of this thesis since the writer tries to construct the company judicial dissolution system. The system should guarantee the litigation rights of the shareholder as well as safeguard the company's normal operation against various attacks; It should protect the shareholder's legal rights on the basis of carrying out the economic principles of the litigation; It should motivate the shareholder to action as well as avoid the occurrence of the abuses of the litigation and malicious litigation. In short, the writer considers the construction of the company judicial dissolution system should focus on the following aspects: First, the disbandment of a company is the undoubtedly the most complete legal mending measures, but not the best solution. So ,this system should follow the three basic principles: to preserve the business subject , try to find all the possible alternative relief measures and limit the case of suiting for company judicial dissolution. Second, the system can be applicable for the Limited Liability Company and Joint-stock Company Limited. As to the judicial dissolution case, the writer suggests that we adopt the enumerating legislative form, concretely, four kinds of situation: the company's business falls to deadlock; the shareholder is found to commit actual fraud or have oppressive behavior; the company operate illegally by making use of its position as a legal person; the capital of the company is abused or suspend thrift. Third, the subject of the judicial dissolution case should be the confined to the shareholder regardless of the share ratio. However, in order to avoid the occurrence of the speculation, we should prescribe the time of shareholding. And in the writer's point of view, one year's time is quite reasonable. As for the judicial dissolution case, it is obvious that the defendant is the company while the plaintiff should be analyzed according to the real situation, the different shareholders can be the plaintiff together and some of them can be the defendant along with the company. Forth, the procedure design of the legislative company disbandment is ambulatory lawsuit in its nature. The choosing of the court is based on the district court, assisted by the intermediate court. During the trial, the judge should make the mediation a priority. And in the real mediation process, two solution can be adopted: to enforce the acquisition or appoint the temporary director. Fifth, considering the possibility of malicious suit, the protective mechanism and punishment mechanism should be set up. Sixth, the court decision has law effect on the company, and the judgment leads to the company's liquidation procedure and therefore, the company is the judicial person of the liquidation. Here, the writer emphasize that there is a distinct between company's dissolution and its liquidation because company dissolution is juristic fact and constitute the main cause of the company's bankruptcy while company liquidation is a juristic procedure which is a part of the perdition of a company. Thus, dissolution is the precondition of liquidation and the latter is the cause of the former. The judgment of the dissolution of a company does not indicate the abolishment of the company's qualification as a judicial subject. It means the company's rights and behavior are restricted in some degree. Only by the liquidation process can the company's qualification as a legal person be cancelled completely.