Chinese Corporate Donation System And Several Legal Problems

Little did Vanke dream of being cursed a bad name while it donated a lot. Thereason lies in the absence of Legal Regulation concerning donation in china. As thefundamental form of the execution of social responsibility, Corporation Donation hasbeen sanctioned by public opinion and advocated by morality. But the Company Lawof People’s Republic of China has only rough principle provisions. So it is difficult toclarify the legitimacy of Corporation Donation only viewed from the point thatcompany should take social responsibility.With the development of economy, Corporate Management Notion andCorporation Administration Structure, the theory of Social Responsibility also makesconstant progress. Stakeholder theory has broken the traditional law idea ofShareholder priority, which brings corporate governance into Co-governance byshareholders and stake holders, using company contracts as the linkage of purchasingShareholders profit while executing corporation’s social responsibility. In particular,Corporation Donation Right has obtained sufficient theoretical support under theconcept of Corporation Citizen. Corporation Donation is more than a form of bearingexterior liability; it is natural right of a company.Corporation Donation Right, especially decision-making authority shall bevested in the Board of the company or board of Shareholders. But there is a vacancyin our law. We have to consider that the decision of Corporation Donation concernsthe validity and rationality of the whole donation, which shall be rested in the board of shareholders. It is unfair to implement unilateral governance, because Shareholdersare just part of beneficiary while donation refers to shareholders, creditors and so on.If let the Board of company be the decision-making body, we should to make strictinformation disclosure system and donation sum limitation system in order to preventthe members of the Board from abusing of donation rights.If the company directors abused, or illegally exercised the right of donation, orcorrupted by the donation, or disregard the rules and regulations and the articles ofAssociation, the shareholders and creditors have to exercise the rights of claimingcancellation suing in court to make the donation invalid within the framework of law.By exercising the rights mentioned above, the shareholders and creditors can protectthe corporation profits against illegal donation.What has been mentioned above is seldom involved in our law. Referring to theinvestigations of European law and American law and taking China’s real conditionsinto account, it’s urgent to present suggestions and recommendations to enact andimprove the legal regulations concerning donation in China.