A Research On Regulation Of Affiliated Transactions

Unfair affiliated transactions undoubtedly has great harm, But how to think about affiliated transactions? What is the harm of affiliated transactions? How do we solve the unfair problem in affiliated transaction? This is a test of legislators. The paper will provide a feasibility proposal in regulation of affiliated transactions. Affiliated transactions are a neutral economic phenomenon. It play an active role in optimize the allocation of resources and improving economic efficiency of group of companies. Because the special relationship between the two sides transactions, It made affiliated transactions dominated by unfair. Unfair affiliated transactions lead to damage of interests of creditors and shareholders in the controlled companies. The legal systems have to face the problem of regulation in affiliated problem. The paper make use of Economics research methods,Laws research methods and Corporate governance structure of the theory in analysis of affiliate transaction. The first chapter of my paper analysis of the concept of affiliated transactions and Chapter II explores the reasons for affiliated transactions and special reasons of affiliate transactions in our nation. Chapter III inspected legislation regulating of our legal system in affiliated transaction and analysis the present situation in affiliated transaction in Chinese enterprises. Chapter IV draw a lesson from regulations systems on foreign affiliated transactions and offer some feasibility advice on regulation affiliated transactions. The papers believes that law departments in the regulatory system on affiliated transactions, mainly Company Law, Securities Law, the Accounting Law, tax laws, etc. Different laws has different goal. It is precisely because the different objectives, the same legal findings of fact and conclusions will be different perspectives and conclusions of the existence of these different law departments. The different laws departments also exit interaction between them. We must give coordination and integration effort in different law departments, so that ensure the effective and reasonable legal regulatory system of affiliated transaction. We must give the concept of affiliated transactions related the system legal defined. Implementation of Equity Separation reform is conducive to strengthening the protection of the interests of small investors, and end the channels of non-flow units shareholders directly harm the interests of the shareholders through "legitimate" channels. Establish a sound system for the disclosure of information related to transactions between enterprises control improper conduct. As the United States Supreme Court Justice Louis Browndavis generation Slovak said,"disclosure is healing community medicine, as the sun is the best disinfectant, Electric is the most effective police." We must improve the corporate governance system for regulations of affiliate transactions, such as the use of the exclusion of shareholders voting system regulations system, shareholders derivative lawsuit system, disregard of corporate personality, establishment of independent directors approved and the system control of affiliated transactions.