Research On The Legal Mechanism For Protecting Creditors Of Limited Liability Company

In modern society, the company which is the highly representative economy organization form, with its unique organization structure of property and business model, plays an important role in the process of the development of the market economy. The limited liability principle is the cornerstone of the Modern Corporation system. Under the principle of limited liability, company property is independent of the shareholder’s property, and the personality of the company is independent to the shareholders’ personality. Shareholders of a firm shall assume liability to the extent of their respective capital contributions, but the company must use all of its assets to bear its liabilities. Shareholders’ investment risk is limited in a fixed range. It stimulates the shareholders’ investment enthusiasm, but also promotes the rapid development of the company. However, the principle of limited liability does not reduce the risk of investment from the actual meaning. The essence of the principle of limited liability is let the company creditors to share the investment risk. Therefore, creditors of the company suffered serious losses. In order to balance the interests of shareholders and creditors, security the trade safety of market economy, the modern corporation legal system designed a series of legal countermeasures to protect the creditors’ interests, such as the system of disregard of corporate personality and the information disclosure institution of public company. Through the first clause, our "company law" clears the legislation purpose of protecting the interests of company creditors:” In order to standardize the organization and activities of companies, protect the legitimate rights and interests of companies, shareholders and creditors, safeguard social and economic order, and promote the development of socialist market economy, we enact this law.”The topic of company creditor benefit protection involves different areas, such as company law, securities law, bankruptcy law, and contract law. We can not simply rely on the company law to construct a perfect law system to protect the interests of company creditors. Company law only discussed and solved the problem derived from the limited liability principle. The company with limited liability and the company limited by shares are different in dealing with the issue of company creditors’ protection. In this thesis, the author only analyzes the issue of limited liability company creditor protection. The author writes this article, is to explore the defects in our legal system of limited liability company creditorprotection, improve the legal system of limited liability company creditor protection, and finally achieves the goal of protect the interests of company creditor.This paper is divided into six parts: the first part describes the changes of creditor protection in our company capital system reform, including the analysis of the relationship between company capital system and the protection of creditor’s interests, the problem existing in the protection mechanism,the specific content of company capital system reform,the impact of capital system reform,and putting forward that constructing limited liability company creditor benefit protection legal system should base in the company credit and the measures of the combination of free and compulsory. The second part explains the thoughts of constructing the protection mechanism of the interests of creditors in limited liability company. Pointing out that in order to construct the protection mechanism of the interests of creditors limited liability company, we should improve the system of disregard of corporate personality, the rules of information disclosure, directors liability rules and corporate control abuse prevention rules. The third part reviews China’s disregard of corporate personality system, finds out the defect of the system of limited liability company creditor protection, and puts forward some specific suggestions. In the fourth part, the author points out the lack of information disclosure rules of limited liability company in our country, and puts forward giving the creditors’ rights to learn the truth to protect the interests of company creditors. The fifth part makes a deep analysis on director’s fiduciary duty of traditional theory of company law, and recommends the limited liability company director burdening a certain degree of fiduciary duty to company creditor. The sixth part introduces the principle of equitable subordination. According to the relevant legislative practice of our country, we find that lawmakers hold a positive attitude towards introducing the principle of equitable subordination in the bankruptcy law. The author proposes the problems of applying the principle of equitable subordination in our country.The problems of the protection of limited liability company creditor benefit relates to many contents. Because of the limited ability, the author does not hold further discussion about some issue. The article inevitably exists omissions, the author hopes to study and discuss with you.