On The External Effect Of Company’s Defective Resolution

The rule of the external effect of the company’s defective resolution was first established in Article 85 of the General Principles of the Civil Law,and then further improved in Article 6 of the Fourth Interpretation of the Company Law.However,there are still omissions in the three aspects of the rule,such as the theoretical choice,the applicable boundary limit and the determination of the applicable conditions.The fundamental reason is that the deep proposition of the external effect of the company’s defective resolution has not received the rational attention of the theoretical and practical circles.There are eight kinds of theories and ways to determine the external effect of the company’s defective resolution,including absolute invalidity,relative invalidity and undetermined effect.Among them,the doctrine that the effect is undetermined gives the company the right of ratification when the opposite party is malicious should be affirmed.On the one hand,this theory makes the legal act implemented according to the company’s defect resolution beneficial to both the company and the relative avoid the rigidity of invalidity.On the other hand,whether the legal act is effective or not depends on whether the company’s ratification can play the role of reprimanding the malicious counterpart.The scope of application of the external effect rules of the company’s defective resolutions is only revocable resolutions and invalid resolutions.From the perspective of the types of resolution defects,the rules of the external effect of the company’s defective resolution should be applied by analogy to the non-establishment resolution,and the rules of the external effect of the company’s defective resolution should not be applied to the invalid resolution.In terms of the former,the failure of a resolution will also take the form of a "resolution",and the counterpart will also form a legal relationship with the company based on the trust generated by the "resolution".Therefore,the failure of a resolution can be analogically applied to the existing rules of the external effect of the defective resolution of the company.For the latter,if the resolution is invalid,the content of the legal act implemented according to the resolution is the same as that of the resolution,so it should also be invalid,and there is no possibility of applying the rules of the external effect of the company’s defective resolution.From the perspective of the resolutions,the resolutions of the shareholders’(general)meeting and the board of directors can have external effects.The resolutions of the statutory shareholders’(general)meeting generally involve the fundamental interests of the company,so the interests of the company should be fully respected.When the resolutions of the statutory shareholders’ meeting are subsequently denied,the legal actions taken in accordance with them shall be null and void.That is to say,we should limit the interpretation of the external effect rules of the current company’s defective resolutions and exclude the resolutions of the shareholders’ meeting on statutory matters.However,the external effect of the statutory resolution of the board of directors is slightly weaker than that of the statutory shareholders’(general)meeting,and the rules for determining the external effect of the defective resolution can be applied.However,in the resolution of the company’s articles of association,when it is necessary to make a specific choice due to the law,it has external effect.As stipulated in Paragraph 1 of Article 16 of the Company Law.Moreover,the determination of the external effect of the resolution applies to the rules of the external effect of the company’s defective resolution.The applicable condition of the external effect rule of the company’s defective resolution is "the goodwill of the opposite party".However,the connotation of goodwill is not clear.Commercial transactions pursue efficiency and maximization of interests,and the transaction subjects should try their best to control the corresponding risks.Therefore,the goodwill of the counterpart should be related to whether it has fulfilled its obligation to review the resolution and relevant materials.There are three theories about the requirements of the obligation of review of the counterpart,namely,the theory of substantive review,the theory of formal review and the theory of prudent formal review.Among the three theories,the prudent formal review theory is preferable.On the one hand,it is necessary to avoid the malpractice that substantive review is harmful to transaction efficiency and increases transaction costs;On the other hand,this statement also overcomes the situation that formal review is like no review.In the current resolution system,there is no prosecution period for the invalidity and invalidity of the resolution,except for the revocation of the resolution which sets the exclusion period.However,the period of prosecution for the invalidity and invalidity of the resolution is not limited,which will make the legal relationship formed by the invalidity and invalidity of the resolution unstable.In order to ensure the efficiency of the transaction and promote the timely exercise of rights by the interested parties,the prosecution period should be set for the non-existent and invalid resolutions.