Factoring Legal Issues Research On The Assignment Of Creditor’s Right In China

A more inclusive definition of the factoring is to be considered as a comprehensive financial services that to provide one or multiple services by sale goods or services in the form of credit sales,receivables collection,credit risk guarantees and financing facilities.As one of the creditor’s rights financing way,its essence of factoring finance is through the assignment of creditor’s rights will be contained in the account receivable property value of the cash in advance,in terms of accounts receivable,before cashing the enterprise not only use but also to take on the burden of its management and collection.And the assignment is equivalent to the early recovery of the future funds,which reduce the management burden and enable enterprises to have sufficient funds to expand production,making fully use of resources.Theoretically,there are many different academic views on the nature of factoring.The author summarized mainly includes: the principal-agent,creditor’s rights pledge,pay on behalf of the said,referring to creditor’s rights guarantee said.The four theories described above partially reflect some of the functions of factoring,but they do not cover all the legal features and functions of factoring.The author analyzes the legal characteristics of the factoring from the definition of the factoring contract,the rights and obligations of the parties,and the position of the relevant international legislation.From the definition,factoring contract relations,the rights and obligations of the parties related to comprehensive analysis of the position of international legislation,etc,the author considered that assign factoring as a creditor’s rights can comprehensively reflect the legal features of factoring.However factoring is developed by the international trade,with strong business practices,and there are many special points comparing with general creditor’s rights transfer.It would appear many problems with the traditional creditor’s rights transfer system to solve in the development of factoring,such as the traditional creditor’s rights transfer system lack of clear rules or deviating to the operation practice,from issues of if future accounts receivable can be transferred,if accounts receivable attached to terms and conditions can be transferred and transfer of creditor’s rights priority rules and regulations of thecreditor’s rights transfer notice.Factoring financing as a kind of accounts receivable financing,to help solve the financing of medium-sized enterprises in China,expand the scope of business scope of financial institutions has important strategic significance.As a kind of accounts receivable financing,factoring financing has important strategic significance in helping to solve the financing of small and medium-sized enterprises in our country,expand the financial institutions,business scope,etc,.Therefore the author believe,we should establish financing trading legislation idea from the point of promoting the circulation,ensuring safety and improve the efficiency of creditor’s rights,and then improve the relevant legal system of factoring.In particular,it should be admitted that the feasibility and necessity of future creditor’s rights participating in the financing,but in order to protect the interests of other creditors and transaction security,appropriate restrictions would be made.In order to improve the efficiency of financing and the cost of examination for the assignee,it shall be denied the external validity of the accounts receivable that is prohibited from the provision of the right to transfer and the provision of the provisions.On the priority of factoring financing rights conflicting rules,the author thinks that the rule “registration first,right first”from American Uniform Commercial Code could be referred,establishment of a unified system of personal property guarantee registration can help to solve various types of rights conflict.As regard to related issues on creditor’s rights transfer notice in factoring business,firstly,in terms of the effectiveness of the notice,to encourage the development of factoring business,we shall protect the interests of the factor(the assignee)with priority,and conside interests of the debtor at the same time,and empower notice with absolute effect to make the debtor to be clear on objects,and also shall clarify the effect of notice is limited to against the debtor,and not affect the ownership of the account receivable;Secondly,in terms of the subject of the notice,notice rights of Factor(assignee)shall be ensured,looking with trend of national legislation and relevant international legislation attitute.