Involuntary Creditors’ Special Legal Protection

The protection for creditors is one of the value objects in corporation system; however, the Company Law of China inclines to protect corporation and shareholders when facing the varied interest demands among corporation, shareholders and creditors, which is closely related with the temporal urgent need to promote economic development by encouraging investment. With the maturity of the limited-liability system, the interest imbalance between shareholders and creditors gets more and more attention while the current legal treatise on the protection issue of the involuntary creditors in our country have only a few amount, which would be mentioned generally in some treatise on the protection for corporation creditors. However, in modern Company Laws, the protection for involuntary creditors has become a problem that should not be ignored. It is not only a challenge brought by the development of times but also an inherent shortcoming in limited-liability system and a necessary requirement of the loose capital system. What’s more, the common law and the Company Law didn’t especially pay attention to the specific group, the corporation involuntary creditors, in which the protection for the involuntary creditors is imperfect as a result from that the legislation has not analyze in deep the varied creditors and their varied degrees of the demand for law’s protection. Thus, it is necessary for us to be targeted to focus on establishing and perfecting the special legal protection system for corporation involuntary creditors.The research key point of this paper is to propose two special optimized approaches protecting corporation involuntary creditors on the basis that reflects the current protection ways for involuntary creditors in the common law and the Company Law. The research difficulty is the proportioned liability of shareholders that needs to break through the deep-in-root limited liability as well as it is also hardly mentioned by these current research works. The involuntary debt itself is not a formal statement in legal text, and it also needs some efforts to define and further upgrade pick in categorization. For the content, this paper has been divided into four parts to illustrate it.The first part is the preposition of the theory study, in which the concept of corporation involuntary creditor is defined and the necessity of the legal protection for them is elaborated. The second part is about the current protection in the common law and the Company Law and the reflection on them. The common law provides the most general and most direct protection mainly through the Tort Liability Law; though the Company Law does not distinguish voluntary creditor and involuntary creditor together without special protection for the latter one, it can be said that the whole Company Law intends to protect the interests of creditors through direct or indirect ways, and it cannot be denied that this has a big significance for involuntary creditors. However, in summary, two of the protection approaches are not perfect enough, and the reason behind it is lacking of the specific analysis on the specialty of this kind of creditors and the lack of the related system protection for it. The third and forth parts are the key points of this paper, which propose two special optimized protection ways on the basis of reflection on the above parts. The third part is the first approach----the proportioned unlimited liability of shareholders. By analyzing the necessity and possibility of breaking through the limited liability of shareholders for involuntary creditors, this part proposes to establish the proportioned unlimited liability of shareholders in our country. The forth part is the second approach----the upgrading of the priority of involuntary creditors being paid. The plan of upgrading of the involuntary debt in categorization is put forward by analyzing the current regulation of the sequence in debt paid and its shortcomings in our country, together with the foreign worthy legislative patterns.