| The phenomenon of cross-shareholding enterprise is the result of the rapid development of commercial civilization in the 20th century. And it appeared lately in China which is related with the planned economy system carried out before reforming. Cross-shareholding is introduced to China by policy extension first and seen it as a method to reform the State-owned Enterprise. During the subsequent developing process, the disadvantages of cross-shareholding appeared. But people has not pay enough attention to its influence to the company and the capital market, Chinese new corporation law has also not set down explicit legal rules and regulations on cross-shareholding, which leads to a big lacuna in the legislation of corporation law. In recent years, although scholars had engaged in research on the legislation and related matching measures of cross-shareholding from the aspects of corporation law, security, accountancy, tax law, monopoly. However the research on cross-shareholding in China is not thoroughly deep, and there still has not a comprehensive system in theoretical research, especially lacking related regulation in corporation law. So, I will give some legal advice about it. The article is based on drawing related legislation both China and some other nations, constructing the legal system of cross-shareholding, which is adaptable to our country present situation and would be the good guidance with the development of future cross-shareholding. It has important meaning for enterprise's long-term development, protecting the rights of Minority Shareholders and creditor, and the healthy operation of the whole market. This paper includes three parts, namely foreword, text and conclusion. The following is the frame of the article:The first part is a summarization, firstly introduce the concept of cross-shareholding both on doctrinal and legislative meaning. And then introduces the different types of cross-shareholding to contribute to the profound understanding. Secondly, analyze the three main reasons of the appearance of cross-shareholding. One reason is the legal basis, which is because of company owning independent personality and the influence of the capital majority rule. The other is the internal demand of the development of company and external fierce competition. Another is the result of the operator contesting control rights. Thirdly introduces the motivation of it. The two main motivation is purpose of income and domination, furthermore there also has political reason in China. Lastly, analyze the legal nature of the cross-shareholding. There are two legal nature of it, one is conduct of bidirectional reinvestment, the other is conduct of the company holding its own shares indirectly. This article discusses cross-shareholding comprehensively by the progressive way.The second part is about the positive and negative effects of cross-shareholding. Analyzing dialectically, the article probe of the cross-shareholding comprehensively from positive and negative effects in theory and practice. The positive effect mainly reveal in economy. This article will summarize its positive effect from microscopic and macroscopic angles. Microscopically, that could descend the corporation's capital costs and business risk, coming to scale economy, preventing hostile takeover, and inhibit dividend payment to ensure the company's long-term development, manipulating the stock price to seek profit for company. Macroscopically, that could promote the development of giant corporations and enterprise groups so as to promote the adjustment and optimization upgrade of industry's structure, and contribute national enterprise to take part in the international competition, and make national industry more powerful. Certainly its negative effect is also obvious, which mainly includes that it may cause inflated capital, and damage creditors' benefit and the equality of shareholders, and it will destroy corporate management and the normal transaction of securities market. Only recognizing the advantages and disadvantages of cross-shareholding, we could regulate it scientifically to avoid its negative effect and develop its positive effect.The third part is about the relationship between cross-shareholding and some related legal system. Firstly, it analyzes its impulse on capital system. But the impulse on capital system will become history for the fact that many countries have a loose attitude towards the capital system and Chinese legislation also has this tendency. Meanwhile it reflects the legal system of company reinvestment, and thinks about how to consummate the fusion of the legal system of reinvestment and cross-shareholding. Cross-shareholding has similarity to the shareholding of its own stock in nature, which is introduced about the regulation in China and other countries. Through introducing the legal system of company holding its own stock in other country and China, according to the theory analysis of capital system, it shows that the shareholding of the company's own stock accords with the trend of China's legislation. And then thinks about the conformity of the system of cross-shareholding and related transaction. Cross-shareholding is definitely brought into the legal system of related transaction in Germany and Taiwan Area, which we can learn from according to the situation of China's legislation. Finally, it has substantial influence on corporate governance. We can solve the problem from the different aspects, such as constraint the right of controlling shareholder, endow more rights to minority shareholders and reinforce the relief system, and so on.The fourth part is to compared with the legislation and regulation of the cross-shareholding company in other different countries and areas. By comparing, it introduced the cross-shareholding company legal norms in representative countries. Foreign legislation generally not completely prohibits cross-shareholding. Most countries and regions adopt "differential treatment" principle to regulate separately the general cross-holding and special cross-holding. Furthermore, some countries have also brought the cross-shareholdings of parent and subsidiary companies into companies holding its own shares system together. It is also summarizing the differences between common law, civil law, and the related overall national laws and regulations, which lay foundation to our legislation about it.The finally part gives legislative proposals in accord with our country status and regulated system, according to the above study and based on the practical status of the cross-shareholding and related laws in our country. Considering the cross-shareholding and related laws, it suggests "differential treatment", which means regulating separately the special cross-holding to the company of parent company and Non-parent, and general cross-holding. Furthermore, introduce the system of restrictions on voting rights, information disclosure and inform obligation. Considering the relationship between cross-shareholding and other relevant legal system, in the framework of Corporation law, I advice about use reinvestment system to restrict Parent company and Non-company cross-shareholding holding shares. And I advise taking cross-shareholding in to related transaction system to regulate it. There still need to perfect other related law system, such as independent director system, supervisor system, etc, to protect the right of the benefit-related person. |
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