The Legal Risk And Prevention Mechanisms Of The Creditor’s Rights Investment

With the growing demand for capital in the development of marketeconomy, as well as the changes of theory on company credit basis, moreand more investment forms of investment are accepted by companies. Thenew "China’s company law" revised in2005provides the legal basis forthis change, and the “Administrative Regulation on the Registration on debtto equity” provides the legal basis for enforcement of the law. As a kind ofproperty, the Creditor’s rights are accepted as a form of investment byscholars and the legislature. However, due to the inherent characteristics ofthe creditor’s rights, the creditor’s rights investment has greater risk thanother forms of investment. These risks will cause damage to the companiesand the investors, creditors, and other shareholders of the companies, evento the system of economic. Therefore, the research on preventionmechanisms of creditor’s rights investment risk is very important.On the basis of existing results, this paper analyzes the basic concept,theoretical basis, history and foreign theories of creditor’s rights investment.Then, this paper discusses the risk of creditor’s rights investment, and putsforward the suggestion on prevention mechanisms against the risk ofcreditor’s rights investment.The first part of this paper is the general description of the creditor’srights investment. Firstly, the author defines the concept of creditor’s rights investment, capital, assets, investment form and other related concepts.Then this part analyzes the rationality and necessity of the creditor’s rightsinvestment theories. Finally, this part analyzed the conditions of thecreditor’s rights investment.The second part of this paper mainly analyzes the Chinese laws,regulations and other normative documents on creditor’s rights investmentand some of the relevant foreign laws and regulations.The third part of this paper is the analysis on the risk of creditor’srights investment in two aspects, the authenticity and realization risk ofcreditor’s rights investment.The fourth part of this paper is the suggestion on preventionmechanisms against the risk of creditor’s rights investment.