The Dilemma And Solution Of The Application Of The Rules For Withdrawing Capital

Shareholders are not allowed to "withdraw of capital" or "withdraw of share capital",which is a legal rule established in China since the promulgation of the"Company Law" in 1993.From the simple description of the act of transferring out immediately after shareholders pay capital contribution,to the bottom line standard for regulating the flow of assets to shareholders in the capital transactions,the meaning and judgment standard of withdrawing of capital have always been vague.The dilemma applied in judicial practice is mainly manifested in two aspects:Firstly,the company’s various assets outflows are simply judged from the formal level.The rule of withdrawing of capital plays a supplementary role.All outflows of assets that are not restricted by the causes or that violate the procedures are included in the scope of capital withdrawal,resulting in a mixture of capital withdrawal,profit distribution,share repurchase and capital reduction rules.Secondly,returning to the origin of capital maintenance,the "impairment of capital" standard seems to outline a clear path for the determination of capital withdrawal.But it cannot protect the interests of creditors,which is contrary to the original purpose of the rule.The dilemma of the withdrawal of capital rule is rooted in that there are systemic defects in the company’s capital outflow system,and the regulation of the capital maintenance principle is misaligned when creditors are protected.The former is manifested as a regulatory gap for disguised contribution,inconsistent scales of existing sub-rules,and lack of synergy.The latter is mainly reflected in the insufficient attention paid to the company’s asset structure and cash flow.The judgment of the company’s solvency is too rough,which does not directly address the core concerns of creditors.Therefore,the company laws of foreign countries are examined and analyzed mainly from the aspects of the capital regulatory path and scale of distribution types.In the process of modernizing company law,company law has developed two different solutions to control the flow of assets to shareholder in the capital transaction.One is that Germany and the United Kingdom have adopted general capital maintenance clauses or distribution clauses,combined with share repurchase,capital reduction,financial assistance and other rules to cover each distribution behavior.In aspects of regulatory scale,Germany adheres to the traditional capital maintenance financial resource regulation model,while the UK moderately introduces directors’ solvency declaration in the areas of private/closed company buybacks and capital reductions.The other is that the United States carried out a subversive reform in 1980,discarding the complex conceptual group under the principle of capital maintenance,integrating all behaviors that substantially reduce the company’s assets without changing the proportional equity of shareholders with "large distribution",and constructing regulatory standards with the" Bankruptcy insolvency" and "equity insolvency" as the core.When countries introduce solvency tests,there are two main trends:full introduction and Compromise introduction.Most states in the United States have directly or substantially accepted the solvency model,but Delaware still retains the concept of authorized capital and has achieved a convergent model of "capital maintenance and solvency test" in the field of share repurchase.Specific to the systematic construction of China’s corporate capital outflow system,it is mainly carried out from the following levels:Firstly,it is clear that "large distribution" and "fragmentation" are the two rule framework models of the corporate capital outflow system,capital maintenance and solvency test are the two regulatory scales of the corporate capital outflow system,and the corporate capital outflow system is closely related to corporate governance.Secondly,Article 35 of the current Company Law is amended to say that "a company shall not return capital to shareholders".At the same time,the connotation of the profit distribution clause in Article 166 of the current Company Law is extended to the scope of broad distribution and the bottom line standard of distribution is set to fill the regulatory gap on disguised distribution.Thirdly,clarify the status of the board of directors as the decision-making entity in the company’s capital outflow matters,and take the fiduciary duty as the direct basis for holding directors accountable,so as to achieve a reasonable allocation of rights and responsibilities.Finally,based on China’s business environment and the degree of hollowing out of capital is not yet serious,the principle of capital maintenance still needs to exist.The introduction of a solvency test on the basis of adhering to the capital maintenance yardstick may be the safest path at this stage.