Research On The Civil Liability Of Limited Company Sponsors

The company sponsors play an important status in the Company Law. Not onlythe establishment of the company must be through the setting up of the sponsors, andafter the establishment of the company it is also affected by the sponsors of greatinfluence. The company sponsors’ behavior of the establishment is not only related towhether the company can eventually be set up, but also affects other sponsors, thesubscribers, creditors, the company’s own interests and even the public interest.China’s new Company Law has added the liability issues that related to sponsors, butthere are still some gaps and loopholes. This paper did a more systematic expositionof the civil liability of sponsors, and put forward some suggestions on the defects ofthe sponsors’ liability.This paper is divided into four parts:The first part: The introduction of this paper. This section first introduces theresearch background and the significance of the article. Then it describes the relevantliterature. Again it describes the research methods and innovations of this paper.The second part: Overview of the sponsors of the company and the civil liabilityfor the sponsors. This section firstly defines the concept of sponsors, and comparesthe concept of sponsors to the related concepts. Then this section discusses thequalification of sponsors from the number, the residence and the nationality, theidentity and the ability. And the author thinks that, under today’s highly developedsocialist market economy, there is no need to be too strict with sponsors’ conditions.Again this section discusses the legal status of the sponsors of the company, anddiscusses the rights and obligations of the sponsors. Secondly, this section explainsthe definition of the civil liability of sponsors, then it discusses the legal basis ofsponsors’ civil liability, and points out that the civil liability is the tool of theCompany Law to maintain the balance of interests, is the result of Company Law tomaintain the maximization of social benefits and the counterpoise of sponsors’ rightsThe third part: It introduces the specific content of initiators’ civil liability of theCo., Ltd. It analyses the civil liability of the Co., Ltd in its establishment stage,founded stage and when the company cannot be established. The company sponsors’responsibilities during the setting up stage include: the responsibilities between thesponsors, the responsibilities to the setting up stage of the Co., Ltd, the responsibilities of the sponsors to the subscribers, the responsibilities of the sponsorsto the creditors. After the establishment of the company, the sponsors liabilitiestoward the company mainly including the capital adequacy liability, sponsors’ civilliability to the third party and the liability for damages. When the company can not beestablished, main responsibilities of the sponsors are the jointly and severally liablefor debts and expenses which arising from the setting up stage, and the jointly andseverally liable for returning of share proceeds plus bank deposit interest rates overthe same period.The fourth part: The proposal for the civil liability of the sponsors of a jointstock limited company. This section first analyses the current situation of legislationand the problems of China’s new Company Law. And then leads to suggestions on thecivil liability of Co., Ltd’s sponsors. Mainly including the following aspects: one is toimprove the sponsors and the related systems, this part includes the definition of thesponsors, the nullity of company establishment, and to strengthen the operation of thecompany personality system. The second is the perfect way to civil remedies, this partincluding the improvement of the establishment meeting system, stipulation of losingrights program, perfecting the information disclosure system of the sponsors, theimprovement of the investment recovery rights, interest penalty provisions andperfecting the rights to claim indemnity. Third is the perfect way to form a completesets of supporting systems. The fourth is to strengthen the operability of the system.