Paragraph 3 of Article 60 of the Company Law
China's "Company Law" stipulates in the "organization" part of the company that directors and managers have a fiduciary duty to the company. Paragraph 3 of Article 60 stipulates: "Directors and managers shall not use the company's assets to guarantee the debts of shareholders or other individuals of the company." Paragraph 3 of Article 60 of the Company Law applies not only to limited liability companies, but also to joint stock limited companies. [6]
The directors and managers of the company violate the legal obligation of good faith and are liable for the company's non-performance. Theoretically speaking, the breach of fiduciary duty by directors and managers only creates a legal relationship between directors, managers and the company, and the rights or interests of the third party to the company are not affected by it. At least in the theory of company law, we can see that the ultra vires acts of directors and managers who violate the articles of association are still binding on the company. [7] It is also at this level that we clearly see that the consequences of directors and managers violating the third paragraph of Article 60 of the Company Law have been accommodated by the provisions of Article 63 and Article 2 14 of the Company Law. Article 63 of the Company Law stipulates: "Directors ... managers who violate laws, administrative regulations or the articles of association when performing their duties shall be liable for compensation." Paragraph 2 of Article 2 14 stipulates: "If a director or manager violates the provisions of this Law and provides a guarantee for the debts of the shareholders or other individuals of the Company with the company's assets, he shall be ordered to cancel the guarantee and be liable for compensation according to law, and the income from illegally providing the guarantee shall be owned by the company. If the circumstances are serious, the company will give disciplinary action. " The directors and managers of the company violate the provisions of Paragraph 3 of Article 60 of the Company Law. Besides the contents stipulated in Article 63 and Article 2 14 of the Company Law, should there be other contents?
The directors and managers of a company use the company's assets to guarantee the debts of the company's shareholders or other individuals, which obviously does not comply with the provisions of the third paragraph of Article 60 of the Company Law. The first question that needs to be clarified now is: Is the third paragraph of Article 60 of the Company Law a legal norm that binds the directors and managers of the company? Still binding the company's legal norms? Because there are different disputes, it needs to be clarified through legal interpretation.
The interpretation of legal provisions should not only follow the language (terminology) used in legal provisions, but also consider the logical structural relationship between legislators' intentions and legal provisions. How to interpret the third paragraph of Article 60 of the Company Law? Judging from the terminology used in the legal provisions, the parties who abide by the obligations stipulated in this article should be the directors and managers of the company, not the company. The directors and managers of the company shall not use the assets of the company to guarantee the debts of the shareholders or other individuals of the company. Judging from the meaning of this article, the legislator's intention is to restrict the rights or actions of the company's directors and managers in order to protect the company's property and the interests of investors, rather than restricting the company or its organs from providing guarantees in business activities. In this sense, the directors and managers of a company are bound by the third paragraph of Article 60 of the Company Law, while the company is not bound by the third paragraph of Article 60 of the Company Law. Furthermore, based on the third paragraph of Article 60 of the Company Law, in the structure of the Company Law, it belongs to the content that stipulates the fiduciary duty of directors and managers of the company. Article 63 of the Company Law evaluates whether directors and managers have fulfilled the obligation of good faith. Moreover, the organizational structure of the second section of Chapter II of the Company Law does not directly involve the position of the company when the directors and managers use the company's property as a guarantee for the debts of the company's shareholders or individuals. The third paragraph of Article 60 of the Company Law stipulates the management of the company, that is, the management norms that restrict the behavior of the company's directors and managers, not whether the behavior of the company as a market subject and the company's personnel represents the company, not to mention the contractual behavior between the company and a third party. [8] Especially considering the second paragraph of Article 2 14 of the Company Law, if a director or manager provides a guarantee for the debts of the company's shareholders or other individuals with the company's assets, the company may order the director or manager to cancel the guarantee, and bear the liability for compensation according to law, collect the income from illegally providing the guarantee, and give punishment if the circumstances are serious. Through the analysis and explanation of this clause, the guarantee provided by directors and managers for the debts of company shareholders or individuals with company property is effective. Where a director or manager guarantees the debts of the company's shareholders or other individuals with the company's assets, the proceeds from the guarantee shall be owned by the company. At the same time, the company may order the cancellation of the guarantee, investigate the compensation liability of the director or manager, and punish the director or manager. The company can "order" directors and managers to "revoke the guarantee" provided that the guarantee is established and binding, otherwise "revocation" has no basis; The counterpart ordered by the company to cancel the guarantee is the company's directors and managers, who are obliged to cancel the guarantee according to the company's order (whether it can be revoked is another question). Obviously, it is not the company that cancels the guarantee; Paragraph 2 of Article 2 14 of the Company Law clearly conveys the information that the company is bound by the guarantee. Based on the above analysis, the third paragraph of Article 60 of the Company Law is only binding on the directors and managers of the company, but not on the company.
Article 80 of the Guidelines for Articles of Association of Listed Companies (1997 65438+February) issued by China Securities Regulatory Commission stipulates that directors shall abide by laws, regulations and articles of association, faithfully perform their duties and safeguard the interests of the company; When there is a conflict between one's own interests and those of the company and shareholders, the best interests of the company and shareholders should be taken as the code of conduct, and the company's assets should not be guaranteed for the debts of shareholders or other individuals of the company. Article 80 of the Guidelines for the Articles of Association of Listed Companies reaffirms the fiduciary duty of directors to the company, and requires directors to guarantee that the company's assets will not be used to guarantee the debts of the company's shareholders or other individuals, but it does not require the company (shareholders' meeting and board of directors) not to guarantee the debts of the company's shareholders or other individuals with the company's assets. At the same time, Article 94 of the Guidelines for the Articles of Association of Listed Companies also stipulates in principle that, within the scope authorized by the shareholders' meeting, the board of directors shall exercise its functions and powers and decide on the company's venture capital, asset mortgage and other security matters. In this sense, the shareholders' meeting of a listed company may authorize the board of directors of the company to provide guarantee for the debts of shareholders or other individuals of the company with company assets, or within the scope authorized by the shareholders' meeting, the board of directors of the company may decide to provide guarantee for the debts of shareholders or other individuals of the company with company assets. In fact, the third paragraph of Article 60 of the Company Law does not involve the shareholders' meeting, which is the authority of the company. If "the director provides a guarantee for the debts of the company's shareholders or individuals with the company's assets, which is not a guarantee prohibited by law with the approval of the shareholders' meeting, the guarantee contract shall be valid". [9] If the company's shareholders' meeting makes a resolution to guarantee the debts of the company's shareholders or other individuals with the company's assets, and the directors and managers guarantee according to the resolution of the shareholders' meeting, the behavior of the company's organs is not bound by the third paragraph of Article 60 of the Company Law, because the third paragraph of Article 60 of the Company Law cannot bind the behavior of the company or the company's organs (such as the shareholders' meeting and the shareholders' meeting). In this sense, the company itself is not bound by the third paragraph of Article 60 of the Company Law.
The company is not bound by the third paragraph of Article 60 of the Company Law, but the directors and managers are bound by it, but is the board of directors in the same position as the directors and bound by it? It seems difficult to answer this question, because the board of directors is composed of directors after all. Moreover, the Supreme Court's ruling on Zhongfu Industrial Guarantee clearly shows that the third paragraph of Article 60 of the Company Law prohibits specific guarantee behavior, which is prohibited by legislation in nature and is a restriction on the directors, managers and the board of directors of the company as a legal person. First of all, we can realize that directors and managers are representatives or agents of the company and cannot be equated with the board of directors of the corporate organ of the company. Paragraph 3 of Article 60 of the Company Law does not restrict the meaning of the company's board of directors to provide specific guarantees with the company's property. Secondly, the board of directors of a company shall not provide guarantees for others with the company's property, which is mostly stipulated in the company's articles of association in practice, not in the law; On the contrary, if the company's articles of association do not clearly stipulate that the guarantee provided by the company belongs to the scope of authority of the shareholders' meeting or shareholders' meeting, the board of directors decides the status of the institution based on its business intention [10] and has the right to decide to provide the guarantee with the company's property; If the company's articles of association stipulate that the board of directors has the right to decide to provide a guarantee by the company, the board of directors may decide to provide a guarantee with the company's property; According to the articles of association, providing guarantee with company property belongs to the functions and powers of the shareholders' meeting or shareholders' meeting, but if the shareholders' meeting or shareholders' meeting has authorized the board of directors to provide guarantee with company property, the board of directors may provide guarantee with company property. In any case, the resolution of the board of directors to provide guarantee for the debts of the shareholders or individuals of the company with the company's property is definitely different from that provided by the directors and managers of the company with the company's property, and there is no room for applying the third paragraph of Article 60 of the Company Law. In principle, the legislative intention of Paragraph 3 of Article 60 of the Company Law is to prohibit directors and managers from providing specific guarantees in the name of the company when performing their duties, and does not prohibit the board of directors from making resolutions on this matter. [1 1] The board of directors is the executive organ of the company's business and the organ that decides its business intentions. Different from the position of directors and managers as representatives or agents of the company, the decisions made by the board of directors are no different from those made by the company itself for the third party (creditor). If we overemphasize the connection between the board of directors, directors and managers, it will confuse the unique legal connotation of the company's organs, which is not conducive to the relative person who deals with the company to judge whether to conduct transactions and the risks of transactions, thus hindering the efficiency and safety of transactions. In this sense, the third paragraph of Article 60 of the Company Law should be interpreted according to the purpose restriction [12], which only binds directors and managers, but not the board of directors of the company.
Where a director or manager provides a guarantee for the debts of the shareholders or other individuals of the company with the assets of the company, the director or manager is not a guarantor, and the company shall be liable for the acts provided by him on behalf of or in the name of the company. The company has the right to investigate the corresponding legal liabilities of its directors and managers according to Article 63 or Article 2 14 of the Company Law, but it shall not use the actions of its directors and managers against the guaranteed party in violation of Article 60, paragraph 3 of the Company Law. It is clear that the law (including the Company Law) does not expressly stipulate that the Company shall not use its assets to guarantee the debts of shareholders or other individuals, nor does it "authorize" the Company to exempt its directors and managers from their responsibilities or obligations to third parties in violation of fiduciary duties. Only when the third paragraph of Article 60 of the Company Law binds the company's directors and managers and binds the company at the same time, and the directors and managers use the company's assets as a guarantee for the debts of the company's shareholders or other individuals in violation of the law, the company claims that they are not bound by the guarantee. However, from the intention of legislators and the above analysis of Article 60, paragraph 3 of the Company Law, we can't see the explanation conclusion that "company" is bound by Article 60, paragraph 3 of the Company Law. Paragraph 3 of Article 60 of the Company Law "only provides for the internal management of the company and has no effect on the external contractual behavior of the company". [13] It is a great pity that Article 4 of Interpretation of the Supreme Law [2000] No.44 makes such an explanation, attributing the consequences of directors and managers' breach of trust obligations to the company (shareholders of the company also benefit from it), so that creditors who trade with the company as guarantees bear the trading risks that they should not bear.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.