Studies On The Legal Status And Liabilities Of The Pre-incorporation Company

According to the present company law, the company gains the legal personalityafter being allowed to register. As a transitional organization before the establishmentof the company, the pre-incorporation company does not have the independentqualification of civil subject and can not bear independent civil liabilities, which isdifferent from the established company.The completion of a variety of establishing actions is the prerequisite of theestablishment of the company. Therefore, in the process of founding, thepre-incorporation company must set up many legal relationships with other legalsubjects frequently, such as: open bank accounts; receive and possess movableproperty; handle the registration of the real estate; rent houses; hire lawyers,accountants; purchase raw materials; sign employment contracts with employees, andetc. Since the pre-incorporation company engages in the above actions, disputes mayhappen, even the procedural law behaviors. The actions of the pre-incorporationcompany can not only determine the establishment of the company, but also concernthe rights, obligations and liabilities of the third person. But the legislation andjudicial practices do not clearly defined the legal status of the pre-incorporationcompany, which leading to the fact that disputes happen because of the unknownlegal subjects in the contracts sighed by the promoters. Therefore, it is necessary forthe company law to adjust the legal issues of the pre-incorporation company andclearly define its legal status and liabilities.To analysis the legal problems of the pre-incorporation company, we shoulddefine the scope first. Comparing with the limited liability company, unlimitedcompany and limited partnership, the establishing requirements and procedures oflimited joint stock company are the most complex. From customizing the charter tothe registration of establishment, the latter will undergo longer time, in other words, the pre-incorporation company of the latter will last longer than the others.So the systems and theories of the pre-incorporation company are moresignificant to the latter. Then with the research methods of comparative analysis,benefit analysis and theory with practice, compare the establishing company’s theory,legislation and judicial practice of the two law systems and our country to carry ona more comprehensive and in-depth study of its legal status and liabilities.As for the legal status of the pre-incorporation company, there are five maintheories in the field of company law: the theory of communities without legalcapacity; the theory of partnership; the theory of unincorporated association; thetheory of unincorporated association with its own characteristics. But all theorieshave their own flaws. Among these theories, the first is the authoritative opinion.Through comparative analysis, admit that the pre-incorporation company has limitedlegal qualification, and can bear relatively independent liabilities with its ownproperty, which not only encourage the business law spirit of encouraging convenienttransaction, embody the fair philosophy of protecting the safety of transactions; butalso can largely reduce the promoters’ risk of founding company, thus, stimulate theirenthusiasm of the founding the company.As for the legal liabilities of the pre-incorporation company, when the companyfails to be founded, academic and judicial practice usually think that promotersshould take such responsibilities; when succeeds, the pre-incorporation company’srelationships with promoters and established company should be considered, in orderto clearly define who should bear liabilities. In addition, the type of thepre-incorporation company’s actions should be distinguished (essential ornon-essential) to determine whether such actions are beyond its capacity.In short, draw lessons from the theoretical results and legislative experience tobuild the perfect system of the pre-incorporation company and guide judicial practice.