On National Compulsion in Company Law

Author: Deng Hui
Publisher:
Publish Date: 2004-05-01
Features: In corporate law, where should the boundary between state compulsion and private legal autonomy be drawn? This is a fundamental theoretical issue in corporate law. This question can be further refined into a more specific one: What are the standards of state compulsion in corporate law and how should state compulsion be implemented? This is the core issue this paper aims to address. State compulsion in corporate law refers to the compulsion imposed by the state in the field of corporate law for public purposes. It is a dynamic and systematic concept that involves legislative, administrative, and judicial aspects of corporate law, thus having a broader scope than the concept of mandatory norms in corporate law. The purpose of state compulsion by the state in corporate law is directly related to the concept of freedom in the context of corporate law. Different views on freedom will lead to different purposes of state compulsion. This paper argues that the concept of freedom in the context of corporate law is shareholder-oriented freedom that does not infringe on the rights and interests of stakeholders. Shareholder freedom, in turn, is the freedom of shareholders to be free from arbitrary coercion by others, rather than collective freedom of shareholders or freedom in the sense of shareholder power or capability. Under this classical liberalist view of freedom, state compulsion in corporate law should aim to protect shareholders from arbitrary coercion by others. Of course, it should also prevent shareholders from abusing their freedom to infringe on the rights and interests of stakeholders. This means that corporate law is not an appropriate field for promoting public policies, and it also indicates that corporate law should maintain neutrality.