The External Guarantees’ Legal Effect Of Violating Articles Of Association

Under the market economic system, the company’s external guarantee is an extremely widespread commercial behavior. Based on using the legislative experience of other countries for reference and investigating domestic judicial practices, the new Companies Act revised in2005, makes our company’s external guarantee system more scientific and systematic, and makes clearer the disputes in theories and practices brought by Article60, Paragraph3of the Companies Act1993. However, due to the provisions of the new Companies Act about external guarantee system which are formulated too concisely, and the lack of the future judicial interpretation which can give proper explanations, many difficult problems in judicial practices caused by different interpretations and the controversy in theoretical circles appear. In these problems and disputes, based on the Article16of the new Companies Act, which confers autonomy on articles of association, the external guarantees’ legal effect of violating articles of association becomes the focus of discussion. In order to dissolve such theoretical debates and the problem of "connection with different sentence" in judicial practices, the paper delves deeply into the external guarantees’ legal effect of violating articles of association..This paper includes four chapters:Chapter1:Basic theory of external guarantees violating articles of association. Combining theory with practice of Companies Act, the paper sums up the specific circumstances of external guarantees violating articles of association, and clarifies the relevant theoretical controversy which has an influence on the identification of the external guarantees’legal effect of violating articles of association. The paper considers that articles of association have certain external effect by guarantee resolutions and company articles’external guarantee events. These conclusions provide theoretical foundation of Companies Act for identifying the external guarantees’legal effect of violating articles of association.Chapter2:The investigation of the effective elements of external guarantees violating articles of association. On the basis of the fact that the association’s external guarantees’behaviors in violation of the articles are legal acts, the paper makes use of traditional German civil law theory to explore deeply the key effective elements of association’s external guarantees’ acts in violation of the articles, including the effective elements and the effective patterns of legal acts, in order to support the identification of the external guarantees’ legal effect of violating articles of association from the perspective of the Civil Law.Chapter3:The identification of the external guarantees’ legal effect of violating articles of association. According to the theory of the company law and civil law stated in the first two chapters, the paper makes specific identifications of the association’s external guarantees’ legal effect in violation of the articles in all kinds of specific situations, summarized in Chapter1.Chapter4:The accountability and practical application of the association’s external guarantees in violation of the articles. From the perspectives of the traditional German civil law theory and the company law theory, the paper separately sums up the principles of accountability of legal act and company’s external guarantees and on this basis, defines the issues of accountability of the association’s external guarantees in violation of the articles in all kinds of specific situations. Finally, in order to demonstrate the rationality of the article’ conclusions, the paper analyzes and re-identifies an actual guarantee case, which is China National Building Materials Import&Export Group Corporation v. Beijing Lang&Overseas Trading Co., Ltd., Beijing Tianyuan Shengtang Investment Co., Ltd., Glory Century Technologies Development (Beijing) Co., Ltd., Jiangsu Yinda Technologies Co., Ltd., and Sichuan Yibin E’ou Engineering Development Co., Ltd.In the study of the external guarantees’ legal effect of violating articles of association, the paper’s innovation lies in:combining the traditional civil law theory and the company law’s theory and practice, from the two angles, general and special, the paper explores deeply the external guarantees’ legal effect of violating articles of association, expecting to seek the correct way to resolve the theoretical disputes and practical difficulties caused in the process of the association’s external guarantees in violation of the articles, and provide the practical and feasible suggestions for the prospective judicial interpretation to improve our association’s external guarantees’ system.