The Studies On The Legal Regulation Of Cross-shareholding Of Companies

Cross-shareholding of companies appeared first in developed countries during the 20th century. As a mechanism which has two sides, Cross-shareholding of companies can provide some positive influence while it can also be abused, and lead to damaging the rule of maintenance of capital, influencing the equity between the shareholders and so on. During the last several decades, many countries introduce the concept of cross-shareholding. With sufficient awareness of its disadvantages, those countries establish different legal regulations to eliminate the defects of cross-shareholding based on different situations of every country.In China, cross-shareholding has a short history but it develops rapidly. Nowadays, cross-shareholding of companies can be found more and more frequently in China's economy life, and it also infiltrates into many areas of economy. However, the legal regulation and related systems on cross-shareholding of companies in China are still incomplete. Even in the"PRC Corporation Law"revised in 2005, cross-shareholding is still ignored and not legitimated. This causes the absence of guidance and specification on cross-shareholding of companies, which means there are still a lot of problems left to be discussed and solved. Therefore, with the continuous exploration of cross-shareholding of companies in China's economy practice, there's more and more requirement on further investigation and research in this area. The aim of research is to improve the legal regulation of cross-shareholding. Therefore we can regulate and guide cross-shareholdingThe study will, on the base of comparison through history lengthways and among countries breadth wise, use the legislation and practices from countries which have mature capital market for reference, draw a personal remark and suggestion on the legal regulation of cross-shareholding in China. The remainder of this research is organized as follows:Introduction, which contains the significance of this paper, is presented in beginning, lay out and give a general view of the whole study;Chapter I is Outline and legal Analysis of Cross-shareholding. It starts with the definition and characteristic of Cross-shareholding and provides several types of cross-shareholding. It also compares cross-shareholding with related concepts to specialize it. The chapter ends with a review of the evolution of Cross-shareholding worldwide during the latest several decades.Chapter II is about its economic function, including affirmative and negative aspects.Chapter III is Comparative Analysis on Legislation of Cross-shareholding. It can be concluded as five sections, three modes. It introduces laws and regulations of four countries: the USA, France, Germany and Japan. The study is devoted to discuss laws and regulations applying to the cross-shareholding in the selected countries and analyzes the legislative reasons behind the two different modes in successionChapter IV, which could be called the core of the paper, gives some suggestion for legislation on Cross-shareholding in China. It includes three sections. Section I is introducing the administration of Cross-shareholding in the existing laws and regulations. Mainly in the"PRC Corporation Law"(both two versions) and other related legal regulations. Followed two sections are about the suggestion for legislation on Cross-shareholding. The choice of modes and value orientation which should be confirmed in the laws is provided in Section II. Then Section III, the last part, presents different suggestions on legislations base on whether the cross-shareholding is between parent- subsidiary companies or regular companies.