□ Qiao Dixiang
Company external guarantee has always been a controversial issue in China's company law. The newly revised "Company Law" in 2005, Article 16, made specific provisions on the procedures of the company's external guarantee. In accordance with the provisions of the first paragraph of this article, the guarantee provided by the company to others shall be decided by the board of directors or shareholders' meeting in accordance with the provisions of the articles of association; Where the articles of association have limits on the total amount of guarantee and the amount of individual guarantee, they shall not exceed the prescribed limits.
Unfortunately, this article omits two important key points. 1. What should I do if the company's articles of association do not stipulate the resolution procedure, the total amount of guarantee and the amount of individual guarantee? Second, there is no provision on how to determine the validity of a guarantee contract that violates this article.
As a result, the following disputes have arisen in judicial practice: is this norm an effective mandatory norm, and is the foreign guarantee contract that violates this article invalid? In addition, as a part of the company law, this provision was promulgated and implemented by the order of president, which means that this law has been known to all the adjustment objects within the jurisdiction of this law. Does this mean that the third party in the company's external guarantee relationship has a legal obligation to inquire about the company's articles of association to determine whether the company's external guarantee has gone through the resolution procedures stipulated in the articles of association? The answers to these questions are directly related to the determination of the third party's malice, and even ultimately determine the effectiveness of the guarantee contract.
The second issue of People's Republic of China (PRC) the Supreme People's Court Bulletin (20 1 1) published the judgment of China Building Materials Group Import and Export Company v. Beijing Dida Hengtong Economic and Trade Co., Ltd., Beijing Tianyuan Tang Sheng Investment Co., Ltd., Tianbao Shi Sheng Science and Technology Development (Beijing) Co., Ltd., Jiangsu Yinda Technology Co., Ltd. and Sichuan Yibin Russian-European Engineering Development Co., Ltd. The main purpose of the judgment is, firstly, Article 16 of the Company Law.
In my opinion, judging from the provisions of Article 16 of the new Company Law and the operability in practice, the reason why the Supreme People's Court made the above judgment is debatable. In my humble opinion, in the case that the company's articles of association have clearly stipulated the resolution procedure, the total amount of guarantee and the amount of individual guarantee, if the company has sufficient evidence to prove that the third party has not fulfilled the necessary review obligation and signed a guarantee contract with the legal representative of the company knowing that the guarantee has not been approved by the resolution procedure stipulated in the articles of association, the guarantee contract is invalid.
First of all, according to Article 16 of the new Company Law, the third party is obliged to review the articles of association of the company to determine whether the company has stipulated the resolution procedure, the total amount of guarantee and the amount of individual guarantee.
The Supreme People's Court's view that "the resolution procedure, the total amount of guarantee and the amount of individual guarantee in the articles of association belong to the internal regulations of the company and are not legally binding on the third party outside the company" is not valid. According to China's legislation and legal provisions and practices, the law will be announced to the public at least in advance before it is formally implemented, so that all the adjustment objects within the legal jurisdiction can know the provisions of the law. When the law is formally implemented, regardless of the facts, it is presumed that the legal norms have been known to all the adjustment objects; Any adjustment object shall not evade legal obligations on the grounds of not knowing the legal provisions.
Specific to this article, the first paragraph of Article 16 of the Company Law clearly stipulates that a company's investment in other enterprises or providing guarantees for others shall be decided by the board of directors or the shareholders' meeting in accordance with the provisions of the company's articles of association; Where the articles of association stipulate limits on the total amount of investment or guarantee and the amount of individual investment or guarantee, it shall not exceed the prescribed limits. Therefore, it can be inferred from the law that the third party should know that the company's external guarantee must comply with the provisions of the company's articles of association. Since then, the articles of association, which once belonged to the internal nature of the company, have become legally binding on third parties. There is a simple reason. To judge whether the company's external guarantee conforms to the provisions of the company's articles of association, the third party must inquire about the provisions of the company's articles of association and review the resolution documents on the guarantee provided by the company. On the other hand, if the third party fails to fulfill these statutory review obligations, it is subjectively at fault and constitutes malice. The third party knows that the guarantee does not conform to the procedures stipulated in the articles of association, and the guarantee contract signed with the legal representative of the company is invalid.
Second, the Supreme People's Court's view that "the obligation to review the articles of association imposed on the third party is infeasible and unreasonable" in the judgment reason is also unconvincing. Paragraph 3 of Article 6 of the Company Law stipulates that the public may apply to the company registration authority for inquiring about the registered items of the company, and the company registration authority shall provide inquiry services. The articles of association belong to the statutory registration items of the company. In fact, the files including the articles of association and the business license of legal person are all registered in the administrative department for industry and commerce. If the public wants to inquire, obviously there will be no such thing as "inoperability and irrationality".
Finally, the Supreme People's Court simply quoted the Supreme People's Court's "About Application"
In my humble opinion, although the court has not yet determined the standards for judicial determination of the effective mandatory provisions and administrative mandatory provisions, it is impossible to determine whether the legal provisions in Article 16 of the Company Law that the company's external guarantee shall conform to the company's articles of association are effective mandatory norms, but it is certain that the legal representative of the company signed an external guarantee contract with a third party in the name of the company without the resolution procedure stipulated in the company's articles of association, which seriously exceeded the authority of the legal representative; In addition, the third party knows that the company's external guarantee should comply with the provisions of the company's articles of association and has been resolved by the company's board of directors or shareholders' meeting. Therefore, it is enough to judge that the third party knows or should know that the legal representative of the company has exceeded his authority, which constitutes malice, and the behavior of the representative has no legal effect. Therefore, even if the court has made certain judicial determination standards for the mandatory provisions of effectiveness and management, it is still impossible to determine that the guarantee contract is invalid on the grounds of violating the mandatory provisions of the law. However, according to the relevant provisions of "Contract Law" and "Guarantee Law" on unauthorized agency, it can still be concluded that the external guarantee contract is not legally effective.
In addition, it should be noted that there are many legislative highlights in many controversial issues in the Company Law, such as Article 16 of the Company Law, "the effect of the articles of association on the third party" and Article 20, "the system of denying corporate personality". Although different positions on these issues may lead to the uncertainty of the conclusion of judicial decisions for a period of time, it is meaningful to discuss these disputes for the improvement of company law and even the whole legal system, but I just hope that these issues will not become the "climbing pole of legal issues" described in the concept of legal kingdom.
(The writer is a lawyer of Yubo Call Center. )
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.