Chinese and Comparative Company Law - Case Study Example

Chinese and Comparative Company Law (Allocation of Power) We cannot live in an ordered society without law. Company law is one part of Chinese law, but it plays a great important role in companies' management and also can improve the Chinese law. However, both of them still have shortcomings and are not perfect. We should take masseurs to make up for the defects. Especially for company law, only when we allocate the power correctly can the company move much better. Key Words:importance, relationship, shortcomings, allocation, cooperation Content Law's importance1 Company law's special function.2 The relationship between Chinese and comparative company law3 Shareholders' importance4 Shortcomings of company law5 Against one person's decision only.6 How to allocate the power correctly7 Conclusion8 Chinese and Comparative Company Law (Allocation of Power) We cannot live in an ordered society without law. No matter where you live and no matter whether you live in a developed country or not, we need law to rule and serve for us. We know that in China there are all kinds of laws, for example, economical law, administrative law, environmental law, and civil law. Each law has its special function to rule our behavior, and all of the common laws are based on the constitution. Laws play great important role in our country. Firstly, the law can protect and promote productive force. Secondly, it can protect and promote the establishment and development of market economical system. Thirdly, it can ensure that socialistic economical system can move smoothly. Therefore how to make and use appropriate law has become a key problem. "It is said that if we want to develop our socialistic market economical system, the most important thing is law. Market economy is the lawful economy in some extent."1 Nowadays, globalization has become the trend. If we want to develop our economy, we'd better cooperate with others and adjust ourselves to the environment. In such a situation, more and more foreign companies have swarmed into China and become one of the strong strength to support the development of economy. In our country, there are also many aspects about the company law in order to protect people's legal profit. For instance, there are the establishment system of company, the capital system of company and the restructuring system of company. Company law is concentrated on the management of the companies. It is helpful for all of the stuff to get equal chances and gain equal treatment. For the head of the companies, it is good for them organize and manage the whole company much better. "The company law is just like a pair of glasses for the shortsighted. Putting on it, you can see much clearer and strengthen your judgment. Without it, you shall not have sharp insight. "2 It is a good metaphor. If there is no law for company, we have no way to protect people's legal right and the equal computation will get nowhere. Besides, it also can limit some people's right who are in high position. "If a member of a liquidation group is found to have abused his or her power to seek personal gains by resorting to deception, or peculated the company's property, he or her shall be ordered to return the property to the company, have the illegal proceeds confiscated and be imposed a fine one time to five times the amount of the illegal proceeds. If the case is serious enough to constitute a crime, criminal responsibility shall be affixed according to law."3 Aim at not abusing right, the law has made out the punishment. If anyone confirms it, they will be punished undoubtedly. Although the company law is just one part of the Chinese law, it also promotes Chinese law's development. In the worldwide, merger&acquisition companies have become one of the most popular forms. However, the complicated work model must be under the control of a sound law. Merger&Acquisition Company is considered as a kind of system to welcome winners and eliminate losers in nowadays economical condition. It can regulate the products, optimize source arrangement, strengthen companies' actual strength and competition, and push forward the development of economic and technology. All of those are Chinese law's purposes. If we continue to sustain the appropriately carrying out of the company law, the society will become much more stable than before. When a company is prepared to be established, we should know the principles about one company. Firstly, we should make sure the company's condition and position. Secondly, we should have rules to make contract. Thirdly, we should understand the shareholder's authority and commitment. If there is no company law to manage those, we cannot tell the regular companies from irregular ones. On the contrary, When a company is declared bankruptcy according to law due to insolvent of debt payment, the people's court shall organize a liquidation group composed of shareholders, relevant departments and specialized personnel according to the provisions of relevant laws and conduct liquidation of the company. Besides, with the market economy's rising, shareholders are taken shape. "They have the right to examine a company's financial and accounting reports, such as the balance sheet, profit and loss statement and the statement of the company's financial condition."4 We also have a law which confers on shareholders of shares or equity. Previously, a company could not repurchase shares except to reduce its registered capital or to merge with a company that holds its shares. These rules apply to companies limited by shares, which can also repurchase shares to grant them to employees as an incentive. Under the law, a share in a limited liability company can request the company to repurchase his equity at a reasonable price. Shareholders' come into being can make the policy much more democratic, and prevent from making an arbitrary decision. However, the company law is still not perfect and has many shortcomings. In daily life, we often hear that some stuff cannot get their payment on time. What is the worse, in some small companies, the workers even cannot find their boss after one-year hardworking. Their legal profit does not get protected. After some investigation, we find out that when workers cooperate with boss, some of them do not make contract with their head. They meet the bosses by other people's introducing and always make an oral contract. In fact, it is not lawful and when their legal profit has been harmed, they can ask for nothing. They are short of lawful proof. "In order to fight against the behavior of violating law, we must make good use of the law. We should not just let it stay in the documents, and we shall put it into practice."5 Sometimes people are not willing to turn to law for help because they do not want the event be enlarged. In fact, they ignore that if they haven't looked into the event and let the person who are harmed their benefits escape from punishment, many more innocent people will fall into his pitfall again. In 2004, there was news about two workers who had fallen down from the third floor, and both of them were seriously hurt. Their boss left them and disappeared. No one could contact him after the two workers lived in hospital.6 From the miserable events, it reflects that we still have a lot of aspects to improve. If the company law is perfect, people will not be hurt easily. Similarly, if the law is perfect, every person who has breaks up the law will be punished. In some companies, most of the policy decisions are made by the director himself and no one else can take part in. Actually, I don't think it is a good idea to leave all power to one person. There is a saying that two heads are better than one. Although other people do not have the same status as the director in the company, they can think much more suggestions than one person can. Sometimes it is difficult for one to deal with all the things of the company. Imagine if one person must be responsible for many things at the same time, when he concentrates on one thing, he will disperse energy at other things. If he cooperate with colleagues and allocate work reasonably, maybe they will finish the job faster in a shorter time. As a director of one company, he must have the ability to allocate work. He must be able to distinguish that what kind of people does what kind of work. If he arranges wrong, it will not only waste time but delay the process of job. The director should be familiar with his subordinates, at least with the people in charge of every department. The better he knows his colleagues, the better they will cooperate. What is more, our country still has many laws unfinished. It is not systematic and many loopholes exist. "In 1993 April 22, No.36 of the share's republish and trade management temporary rules said that the transfer possession of share which belong to state must get the sanction of our country's related department, and concrete measures will be ruled in addition."7 Until now the rules haven't been made out. Besides, for the Merger&Acquisition Companies, scheduled right has not been given any rules. "Whether our country agrees to purchase share or not; If so, what is the condition Whether we should get special department's sanction " 8If the country does not make the rules, we will meet many problems in market economic. We'd better predict the problems we may come across and make rules in advance, and then we can gradually modify those rules. That is a good choice. No matter Chinese law or company law still has the room to be stepped up. Compared with capitalism countries, we have a long way to catch up. For citizens, we should strengthen our conscientiousness of law and learn to protect our legal right. For the country, we'd better work together and contribute to the construction of the law and perfect it gradually. Only in this way can the law system develop much better. Bibliography: 1. Gu Chunde, 2002, The Law of County, 2003.7, Beijing: Higher Educational Press (my translation) 2. Yuan Zhengguo, 2004, The Law for Education, 2005.3, Beijing: Educational Scientific Publisher (my translation) 3. Company Law of the Peoples Republic of China, 2005.9 http://www.chnlaw.net/englishlaw/HTML/englishlaw_699.htm 4. Shen Zonglin, 2002, Jurisprudence, 2003.7, Beijing: Beijing University Press (my translation) 5. Wu Yue, Systematic Defects of Chinese Company Law Under a Reform Approach, 2003.2, http://www.ilib.cn/A-xdfx200302020.html (my translation) 6. Workers Hurt and Boss Disappear, 2004.12, http://www.cqwb.com.cn/webnews/htm/2004/12/14/91649.shtml 7. The Thinking and Suggestions to Merger&Acquisition Company System, 2005.3, http://office.yeewe.com/d/09152450067_3.Html(my translation) 8. Liu Chongqing, 1998, the Law of Merger&Acquisition Company, 2001.3, Beijing: The Lawful Press Read More