Enterprise law

Author: Guo Fuqing
Publisher:
Publish Date: 2003-01-01
Features: Preface Enterprises are the most active protagonists on the grand stage of the modern market economy, serving as the microfoundation of the national economy. Modern civilization has entered the knowledge economy era, with its material base being an industrial system led by the internet, information science, and biotechnology. The driving force that keeps it dynamic remains the enterprise. In the process of global economic integration and regionalization, the organizational forms of enterprises are becoming increasingly diverse, and innovations in corporate legal systems are becoming more flexible and aligned with the objective needs of real economic activities. Faced with increasingly fierce international market competition, corporate capital is highly concentrated through mergers, acquisitions, and reorganizations. Companies are gradually achieving group status through continuous expansion, adopting strategies of diversified operations and cross-border operations, which have become a trend in global economic development.
Our era is the age of enterprises, and particularly large enterprises, which control the lifelines of society and concentrate the long-term interests of human civilization in the wealth controlled by entrepreneurs. With economic development as the central task, it is inevitably determined that China's urban economic system reform has always centered on enhancing the vitality of large and medium-sized enterprises. China's economic system reform serves as a bridge for transitioning from a planned economy to a market economy, with corporate reform always playing a pioneering role. The corporate reform aimed at enhancing the vitality of state-owned large and medium-sized enterprises has undergone more than 20 years of trials and hardships, from decentralizing power and transferring benefits, expanding corporate autonomy—profit tax reform—contract and lease operations—establishing a modern corporate system, and the journey remains long with no end in sight. From partial to comprehensive corporate reform has led to significant changes in the production relations based on enterprises, thereby liberating corporate productivity and stimulating corporate vitality.
Decentralizing power and transferring benefits, as well as profit tax reform, were reforms made at the level of the state-enterprise distribution, but without touching on corporate property rights or establishing the true legal status of state-owned enterprises, these measures were difficult to implement effectively. Internal leadership system reforms and contract and lease operations under the principle of "separation of ownership and management" ultimately failed to fundamentally solve the problems of corporate lack of vitality and low efficiency, as enterprises still lacked independent property rights and true legal personality. Only by establishing a modern corporate system under the market economy system and conducting standardized corporate transformation of public-owned enterprises can they possess independent legal property rights, thereby shaping independent market entities and forming mechanisms of autonomous operation, self-accountability, self-development, and self-improvement.
The modern corporate system is the microfoundation of the market economy. Only by shaping numerous diversified, independent market entities and engaging in fair competition in the market can a sound market system and mechanism be cultivated. The reform of enterprises and corporate legislation in China are an inseparable and interactive relationship. Corporate reform has broken the outdated production relations that constrained enterprise development, liberating corporate productivity and improving economic efficiency. This inevitably requires legislation in the superstructure to adapt accordingly. In this sense, corporate reform determines corporate legislation, setting the direction and content of corporate legislation, and playing a significant role in promoting the development and improvement of corporate law and the formation of the corporate legal system.
On the other hand, the achievements and effective measures of corporate reform need to be promptly elevated to law and institutionalized, thereby guiding and standardizing corporate reform and ensuring its further deepening. In particular, forward-looking legislation plays a guiding role in corporate reform. During the process of corporate reform, China has successively promulgated and implemented a series of corporate laws and administrative regulations, including the Law on Joint Ventures Between Chinese and Foreign Enterprises, the Law on Cooperatives Between Chinese and Foreign Enterprises, the Law on Foreign Enterprises, the Law on State-Owned Industrial Enterprises, the Company Law, the Partnership Enterprise Law, the Law on Sole Proprietorship Enterprises, the Law on Township and Village Enterprises, and the Law on the Promotion of Small and Medium Enterprises. This indicates that China's corporate legal system, based on the legislative basis of corporate property organization forms and liability forms, has taken shape under the market economy system.
Corporate reform and corporate legislation have provided rich content and research topics for China's legal education and legal research. While legal research continuously discovers problems and gathers materials, it also produces a large number of high-quality research results, providing theoretical support and practical, rational suggestions for corporate reform and corporate legislation. The teaching content of corporate law must not only reflect the achievements of corporate reform but also continuously update and enrich itself to keep pace with its development and changes. However, corporate reform has also placed China's corporate legal system during the transition period in an uncertain state of change, which inevitably poses significant challenges in grasping the scientificity, rationality, and future direction of the teaching content system of corporate law.
The writing approach of this book is based on corporate legislation that adapts to the market economy system, with a focus on explaining the legal systems of companies, partnerships, and sole proprietorship enterprises, and with the establishment of a modern corporate system as the thread. Due to the declining and potentially gradual loss of the original regulatory function of the legal system for public-owned enterprises during major transformations, it is not detailed in this book but only mentions the process and direction of its reform. As for those enterprises that have yet to be fully established or represent institutional innovation, they are discussed from the perspective of future development prospects.
In addition to the preface, the book is divided into five parts: "Enterprises and Corporate Law," "Law on Sole Proprietorship Enterprises," "Law on Partnership Enterprises," "Company Law," and "Corporate System Transformation and Innovation." The first part elaborates on the basic principles of corporate law and the legal systems with commonalities derived from various types of enterprise organizational forms. The second, third, and fourth parts respectively introduce and discuss the legal systems of sole proprietorship enterprises, partnership enterprises, and companies. The fifth part reveals the direction and pathways for the transformation of state-owned and collective enterprises into modern enterprises and argues for the institutional innovation of corporate systems needed for China's market economy.
Guo Fuqing
September 2002, Xi'an