Study On The Calling Up Of Capital From The Perspective Of The Reform Of Subscription Capital System

In 2013,the company law drastically modified its capital system,and greatly relaxing the restrictions on shareholder’s contribution.The shareholder’s contribution plays an important role in the company’s operations,and it sometimes may be related to the company’s existence.Because of the limited liability of shareholder,the company’s business risk was transferred to the creditors.Therefore,the company law attaches great importance to the protection of its creditors.With the increase of freedom for shareholders to invest to the company,the issue of insufficient contribution may affect the company’s operation and the interests of creditors.However,the existing capital call system is so simplistic and lacks systemicity.Calling through judicial procedures also brings higher costs.If the shareholders cannot make contribution properly,how to maintain the company’s operation and protect the interests of creditors? This article will discuss this problem in four parts.The first part discusses the relationship between capital,capital call system and the company.Specifically and firstly,this part discusses the role of capital in the company and analyzes its functions in corporate operations and creditor protection in detail,and affirms the significance of call of capital;secondly it discusses the main content of the capital call system,and as a supporting system,the capital call system has an important role in the company.The second part discusses that there’s urgent need for the perfection of the capital call system,due to the reform of the capital system and the change of ideas behind the reform.First of all,this part introduces the reform process of the capital system,and then analyzes reform’s effect on the company’s operations and the creditor protection,under the revision of the specific provisions of the current capital system.Then concluding that there’s need to establish the capital call system in the company law to protect the company’s business needs and the interests of creditors,which should match the current capital system.Secondly,it analyzes the change of ideas behind the reform,an discusses the role of capital in the protection of creditors under the concept of “asset credit”;while emphasizing the value of efficiency and company’s self-management,we should establish a prepositioned call procedure;Finally,due to the statutory nature of the contribution obligation,the balance of interests of all parties involved in the capital contribution and the need to accelerate the shareholders’ contribution obligation under specific circumstances,there’s necessity of establishing a comprehensive capital call system under the subscription capital system.The third part analyzes the deficiencies of China’s current capital call system combining with the regulations of the US,the UK and Germany.Specifically,first of all,company’s internal agent for calling are not clear,and the UK,the US,and Germany all generally appoint the board of directors as the agent for calling.The existing regulations are limited that it only be used when the time of capital contribution expires in the company’s establishment or capital increase procedure.while in the US and the UK,the board of directors can make calling at any time in accordance with the needs of the company;In addition,the UK designed a detailed shareholder equality provisions in its call system,also be worthy of reference.Secondly,the existing system can only make calling through litigation channels,which caused the problem of high costs and long time.While the US,the UK,and Germany all provide comprehensive prepositioned call procedures in the company law.So the company can calls directly,also those country generally provide the fundraising procedures when the company cannot collect contribution.Finally,China’s regulations on shareholder’s responsibilities and directors’ obligations are too simple.The UK and Germany set detailed provisions on forfeiture of shares and overdue interest.While directors’ obligations is important to the call system,but now it’s only regulated in the company’s capital increase procedure.The fourth part discusses the legislative proposals for improving our country’s call system.Under the background of our country’s new capital system and the changes of the ideas,this part discusses the substantive rules,procedural regulations,and the improvement of the guarantee system related to the call system.Firstly,inside the company,the board of directors should be the main agent of the call,due to their familiarity with the company’s business.In the limited liability company,the board of directors’ right to call should be given by the articles or the shareholders meeting.In the company limited by shares,the board of directors should be directly responsible for the call.Except for the situation that the contribution time expires,the board of directors may make a call in the event that the company’s existing property cannot pay off the debt or the company’s operations require the contributions from the shareholders.And the target of the call includes both the current shareholder and the people who sold the share.Secondly,a prepositioned capital call procedure should be established.If the pre-procedure fails to achieve its purpose,the call can be made through the litigation channel.If both channels are not success to get the contribution,the shares can be forfeited and sold or procured by other shareholders on a pro rata basis.Finally,for the guarantee system of the call system,on the on hand we should clearly specify the directors’ obligation to call and if breach the obligations the directors should bear the corresponding responsibilities;on the other hand,it is necessary to establish the system of the overdue interest and loss of shareholder qualification.