Study On The Involuntary Creditors’ Legal Protection

Company is one of the most important economic organizations in the moderneconomic society, and its system construction affects the economic benefits of the othereconomic organizations and even the whole society. While the limited liability system isthe cornerstone of the company law system, and the establishment of the limitedliability system has played a promoting role to the development of the modern globaleconomy. The limited liability system is undoubtedly a great invention of the moderncompany system, the original intention of its establishment is to encourage theshareholders to invest and to set up a liability barrier for the shareholders’ investment.However, in the modern company law, the protection of the company involuntarycreditors’ interests has become a problem that cannot be ignored, in addition, theinvoluntary creditors can’t predicate the infringement behaviors of the company andthey are in the weak legal status that they can’t supervise the situation of faith in thecompany. Therefore, in the modern company law, it is very necessary to turn theover-protected interests of the company shareholders and to build a protection system assoon as possible for the interests of the company involuntary creditors in China.The20th article in the Company Law of the People’s Republic of China stipulates theshareholders’ legal liability for the creditors directly, but the creditors aren’t classified ascontract creditors and involuntary creditors. In addition, in the judicial practice, there isno contractual relationship between the involuntary creditors and the company, andwhen the company applies for the bankruptcy caused by the wide-scale tort andinsolvency, the involuntary creditors’ interests will not be protected. Therefore, whenthe legislators amend the Company Law of the People’s Republic of China in future,there should be a new single article in it to protect the interests of involuntary creditors.Traditional authority on the corporate organ holds that the creditors are injured whenthe directors execute the corporate affairs, the company should be responsible for thetort and then the company asks the directors for the compensation. But the internalliability will reduce the directors’ responsibility due to the factions in the company. Andit’s hard to give the warning signal to the directors. So it is very necessary to improvethe existing problem that the company and directors share the responsibility for theinvoluntary creditors in China.In addition, on the sequence of the bankruptcy liquidation of credits in our country,the credits of the creditor as the common credits are at the bottom. Contract creditorscan claim their rights through the contracts with the company, but involuntary creditorswithout contracts have no ways to claim their rights. Therefore, giving the priority ofpaying to some involuntary creditors in the bankruptcy liquidation is an effective way toimprove the weak legal status of the involuntary credits.The writer comes up with three pieces of advices about involuntary creditors’ legalprotection by studying the ways how the foreign company to protect them by law andcombing the condition of rule by law in our country. First, the personality denial systemin company law should be improved to apply to the involuntary creditors. Second, our country should build the directors’ legal responsibility for the involuntary creditors assoon as possible. Third, the involuntary creditors should be given the priority of payingin the bankruptcy liquidation as early as possible in China.