On The Protection Of Creditors' Interests Under The Company's Registered Capital Subscription System

Company Law of the People's Republic of China was adopted at the Fifth Session of the Standing Committee of the Eighth National People's Congress on December 29,1993 and went into effect on July 1,1994,amended for 4 times.The most impressive highlight of the last amendment,made by top legislature on December,2013,lies in reform of the registered capital system,it officially established the system of commitment to payment of registered capital,restrictions regarding minimum registered capital shall be lifted;upon incorporation shareholders(sponsors)shall no longer be restricted in terms of the proportions of “down payment” and duration for full payment of investment.This amendment,which responded and adjusted to the development trend of Chinese and global registered capital system,was made in a view to reduce cost of start-ups,stimulate non-government investment,make market economy more prosperous as well as reduce access thresholds with the purpose of improving the degree of autonomy and self-management for the company and offering more flexibility to potential investors to meet the challenges posed by the market.Apart from the big advantage of boosting economy,problems brought by this new registered capital system need to be solved carefully.At first,this article elaborated the contents and characteristics of registered capital system,the author put that Compromise Capital System,fromwhich we should learn to improve our laws in future based on China's conditions,conformed to development trend of company law at international level after detailed and accurate comparisons of main characteristics,strong and weak points of 3 capital systems adopted by a majority of countries,namely Statutory Capital System,Authorized Capital System and Compromise Capital System.Secondly,the author gave brief reviews and introductions to some modifications of China's active company law.As a whole,core statements and ideas of system of commitment to payment of registered capital were formulated safely and significance of adopting the new capital system was also demonstrated by means of value analysis of commitments undertaken by shareholders under new capital system.Thirdly,drawbacks such as in veracious investment and deficiency of capital contribution occurred from time to time and their causes produced by adoption of the new system seemed inevitable.As a result,some challenges such as the weakening of security function of registered capital,affected creditors' right relief behind uncertain amount of property possessed by relevant debtors,infringement upon creditors' interests by increased autonomy of shareholders,all these would cast a dim light toward protection of creditors' interests.In the last part of the article,in terms of mechanism of problem solving,perfection of current system and establishment of targeted new system,the writer tried to summarize this dissertation as the statement that intensified protection for creditor's interests under the newly-adopted system of commitment to payment of registered capital can beachieved in the following 5 ways: rebuilding of a sound company credit system,improvement of Disregard of Corporate Personality System in China,emphasis on director's obligation of keep honest and liability for damage,a step-by-step establishment of creditor's participation in corporate governance,an enhanced self protection awareness and capacity for creditor against any possible infringement.