As the main shareholder of the subsidiary, it is a common commercial behavior for the parent company to provide guarantee for it. However, when providing guarantee, the parent company needs to make decisions in accordance with the requirements of the Company Law and relevant laws and regulations, and ensure that the guarantee will not adversely affect the interests of the parent company and other shareholders. According to the Company Law of People's Republic of China (PRC) and other relevant laws and regulations, the guarantee provided by the parent company to its subsidiaries needs to be notified to all shareholders through resolutions and announcements of the board of directors. At the same time, it is necessary to ensure that the amount, term and method of guarantee comply with the law, and shall not exceed a certain proportion of the net assets of the parent company, and shall not harm the interests of the company and other shareholders. Specifically, the parent company should formulate a guarantee management system, establish a risk control mechanism, and strictly control the scope, amount and risk assessment of the guarantee. At the same time, it is necessary to perform obligations such as information disclosure and approval procedures in accordance with relevant laws and regulations to ensure the legitimacy and transparency of the guarantee behavior.
What does the coverage include? The scope of guarantee generally includes the responsibility, duration, method and amount of guarantee. Specifically, it includes guarantee subject, guarantee form, guarantee amount, guarantee period, guarantee repayment order, guarantee risk assessment, etc. If the scope of guarantee exceeds the provisions of the Company Law and other relevant laws and regulations, it may lead to related problems and risks.
The guarantee provided by the parent company to the subsidiary company needs to meet the requirements of the Company Law and other relevant laws and regulations to ensure that the guarantee will not harm the interests of the parent company and other shareholders. In practice, it is necessary to strengthen the guarantee management, improve the risk assessment and control mechanism, standardize the guarantee behavior, and prevent the occurrence of related risks and problems.
Legal basis:
Article 46 of the Company Law of People's Republic of China (PRC) * * * If a company borrows money from external units or undertakes any form of debt to provide or guarantee for its subordinate enterprises, it shall be resolved by the board of directors and disclosed at the shareholders' meeting; However, the amount provided or guaranteed shall not exceed 50% of the company's net assets.