Study Of The Company's Articles Of Association Legal Issues

Facing the autonomy of corporation,the revised Corporation law is reconstructed by conferring more management rights to corporations,which lessens the government's controls.Being the essential legal document,article of incorporation is a significant mechanism to realize the autonomy of corporations,as well as the internal highest-level regulations.As a successful corporation must be provided with individual character,both Corporation law and article of incorporation which reflects companies' characteristics should be abided by strictly.Contrary to former researches about the system of article of incorporation which made an overall investigation,this essay focuses on some important issues only.Beginning with the introduction of the concept and characteristics, the writer studies the nature of article of incorporation and moves forward a single step to the effect of article of incorporation.In the end,in order to prevent corporate deadlock,one of the function of article of incorporation should be brought into play effectively.In detail,except for the introduction and the epilogue,this article includes four parts:Part 1,identifying the concept of article of incorporation and making an abstract summary of its legal charteristic.Based on the foreign-domestic theories,the writer considers that article of incorporation,which are the essential legal documents,initiated by the corporation founder and the shareholders and finally passed by the shareholders' conference with majority agreement,specifies the corporation name,tenets,scope of management, organization,capital management and the duties and rights between the corporation and shareholders and shareholders themselves.The essence of article of incorporation is a basic behavioral norm which should be followed by the high-ranking officers such as shareholders,board members,supervisors during routines,and its form represents the written legal document recording the fundamental items.About article of incorporation's legal characteristics,the writer has the following opinions:firstly,it is legitimate for article of incorporation's drafting,content effect and modification should be abide by law. Secondly,companies are permitted to set out autonomous regulations adjust to their different conditions within lawful extent,so it is autonomous law.Thirdly, because article of incorporation is one of the public legal documents of corporations and a manifestation for public principle of Corporation law,it is open.Part 2,the nature of article of incorporation are analyzed.There are three representative theories.Contract Theory:article of incorporation is an agreement reached by the whole shareholders,therefore it is their consent.Autonomy law Theory:article of incorporation is company's own autonomous law which is drafted under the directions of mandatory roles,to balance all inteanal parts' interests.Charter Theory:The theory maintains that articles of corporation is neither contract nor autonomous law,it is a legal document similar to Charter. To contract theory,it can not tell the differences between the contract and article of incorporation and is not a precise identification to article of incorporation characteristics.To autonomy law theory,it is reasonable to emphasize autonomy will within legal restriction,but is not suitable to be called law.To charter theory,it does not conform to rules of economical development, though it emphasizes article of incorporation's importantances.The author makes analyses and sums up the above viewpoints,ponders over the nature of article of incorporation,integrating with relevant provisions of our country Corporate law,and comes to a conclusion at last that article of incorporation are contractual autonomous regulations.Part 3,effect of article of incorporation is studied.Bothly in theory and in practice,the most concern about article of incorporation is effect.The author simply divides the requirements by which article of incorporation bring about effects into formals and substantials.Regarding to the effect of time,the author maintains that article of incorporation become effective after the registration and invalid when the corporation is terminated.Regarding to the Effect of officers, the relevant provisions of Corporation law are adopted,that is,it has constraint force to shareholders,board members,supervisers and the premier managers. Regarding to analyzing the validity of the clauses,the author starts with characteristics and division of Corporation law,proposed a general criterion:To mandatory roles,Corporation law forbids any changes.To enabling rules,they are invalid until they are applied by the company,and to suppletory or default rules,their forces have priority to the correlate provisions of Corporation law if they are provided.Meanwhile,it may be not very reasonable that the validity of the regulations are judged by the fixed macroscopic models,but individually upon the comprehensive consideration based on values and policies of legislation.To vacuum zones,The author does not think companies have absolute autonomy because it will bring about potential harms to public interests.Part 4,bringing the functions of article of incorporation into play properly in order to prevent occurrence of corporate deadlock,article of incorporation is feasible to strengthen national supervision and shareholders'autonomy,so the clauses of which can be used to prevent corporate deadlock.There are different ways according to different causes and types of Corporate deadlocks.For limited knowledge,the writer puts forward two propositions:Introducing the withdrawal system for those stockholders and board-members who have a stake to prevent occurrence of Corporate deadlock.Adoption of Buyout system to reduce potential harms caused by deadlock to the least.Although the writer has made great effort to Corporate legal issues by referring to domestic and foreign research achievements,limited materials and limited level of the theory lead to many disadvantages in the article. Nevertheless,the writer wants to evoke more attention to the article of incorporation,both in theory circle and practice circle,for the sake of the true realization of article of incorporation's autonomy.