How Do I Form a Company?

A company under establishment refers to a special organization formed during the preparation of a company by the company's promoter (or founder) to enter into a contract or agreement to establish the company in accordance with the Company Law and relevant company regulations. It is based on an effective company establishment contract, connecting the company's promoters, and establishing its corresponding rights and obligations relationship.

Establishing a company

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Established company means

As an internal governance structure, the company acts as an independent legal entity with various entities.

Establishing a company is a new concept that emerges with the increasing complexity of modern company establishment procedures and more independent establishment. Civil law scholars generally think that a company in establishment is

The definition of the legal nature of the company in establishment is related to the different construction of the responsibility model, which is the premise. Only with a clear definition can the subsequent research be successfully carried out.

Regarding the legal nature of the company under establishment, that is, whether it can be an independent civil subject in law and enjoy specific rights and assume specific obligations, there is no unified and clear understanding of the theory of company law. Scholars differ in their theoretical understandings, and mainly have the following four views:

1. Partnership said. According to this theory, the founder of the company was a partner before the establishment of the company, and the group formed by the promoter was a partnership. "If the company is not registered without approval, it cannot be considered as having an independent personality."

The establishment of a company is all the actions required to obtain the qualifications of the company and complete the legal requirements. The reason why research on the establishment of a company often falls on the keyword "behavior" because this is the core of the legal system of establishing a company. The dispute over the subject's rights and capabilities is a prerequisite for the effectiveness of "acts", and the ownership of responsibility is a follow-up question of "acts". The starting point of this research method is the recognition of the company's ability to establish civil rights.

Compared with the normal operating status of the company after its establishment, the establishment process of the company is an extraordinary state of the company. The sponsor's initiation and trading behavior during the establishment of the company is carried out with creditors and subscribers. The consequences of the behavior are It will involve the distribution of risks and benefits among the established company, creditors and promoters. The classification criteria for these behaviors directly reflect the thinking of the analysis, and will also directly affect the systemicness and integrity of the conclusions obtained.

According to the purpose of the act of establishing a company and the legal subject, the act of establishing a company is divided into an act of initiating and a transaction of establishing a company. In order to promote the establishment of a company, the promoter must inevitably carry out the necessary creation activities. These activities are called initiation behaviors, and the behavior of the promoters in the name of the company to conduct transactions with others is referred to as the establishment transaction. The advantages of this distinction are: 1. Judging by its nature, it can get rid of the generalized distinction standards such as time when the contract was concluded and the name of the person who signed the contract, which is often used by scholars in the past, so as to grasp the behavior of the company in establishment More accurate, it helps to further the research on the establishment of companies. Second, the liability model created according to this division is relatively comprehensive, and can basically cover the attribution of various acts during the establishment of the company (It should be noted that the legal liability caused by the defect of the establishment of the company does not belong to the behavior of the company in the establishment in this article. Consequences of this, therefore, the model does not take into account the liability of the initiator caused by the invalid establishment of the company). Third, it is easy to judge from the appearance of the behavior, so that the responsibility of the behavior can be smoothly classified into the model to which it belongs, and the efficiency optimization brought by the establishment of the model is achieved.

(I) Initiating behavior

The initiation act refers to the act of the founder to complete the establishment of the company in accordance with the conditions and procedures stipulated by the law. The core of these acts is that these acts are for the purpose of establishing the company. Some scholars call it the former company behavior, which considers it to be a preparatory act for the company's operating behavior, which is of great significance to the normal operating behavior after the establishment.

Some scholars refer to the inherent behavior of establishing a company as the initiating behavior, that is, the authority of the founder. Looking at the corporate legislation of various countries, it may include (but not limited to): entering into a promoter agreement, entering into a company's articles of association, electing a board of directors and a supervisory board, Application for registration of establishment, raising of shares, capital contribution, subscription of shares, payment of subscription funds, convening of company establishment meeting, and application for registration of registration. As far as its nature is concerned, application for registration of establishment, application for issuance of shares, application for registration of establishment, etc., are related to administrative entities and belong to Administrative acts, the rest are civil legal acts. The initiation behavior is characterized in that it is limited to the legal relationship between the initiator and the establishment of the registration authority, and between the initiator and the subscriber for the purpose of establishing a company, and generally does not include transactions with third parties.

(II) Transaction behavior of the established company

In commercial law, transaction refers to the commercial activities of commercial entities for the purpose of profit. It is a dynamic circulation activity. Most of them are the process of entering into a commercial contract and fulfilling relevant commercial law obligations. The biggest difference between the trading behavior and the initiating behavior of the company under establishment is that the initiating behavior is to perform the company establishment procedures in accordance with legal requirements, while the trading behavior is performed with other commercial entities and is based on "seeking benefits beyond capital" for purpose.

1 Overview

In a sense, the establishment of trading behavior systems by companies in various countries mainly focuses on economic and social effects, and puts legal factors in a secondary position, because according to the traditional civil law legal behavior rules, the subject of civil legal acts cannot The contract is concluded in the name of a fully qualified legal subject, which results in an absolute invalid contract from the beginning, and there is no way to make it effective by renewing or undertaking the contract. Therefore, purely from a theoretical point of view, the transaction behavior before the establishment of the company can neither be placed under the system of no agency, nor can it be considered as a contract of a third party of interest, which is almost in a state of "law vacuum".

The reason why the theory of company law puts forward a different perspective on the transaction behavior before the establishment of the company than the contract law, and the conditional recognition of the existence of non-essential transaction behavior before the establishment of the company is due to the consideration of the special relationship between the promoter and the company, and the establishment of the company. The characteristics of the pre-transaction behavior are to enable the company to save the transaction cost by receiving the transaction of the initiator before the establishment of the company, and it also meets the original intention of the initiator when trading. Therefore, it is not feasible to seek a solution to the pre-establishment transaction from the perspective of contract law. It is necessary to jump out of the strict rules of civil law and seek a solution from the perspective of commercial law.

2. Classification

The trading behavior of a company under establishment refers to the contractual behavior of the sponsor in the name of the company with other economic entities before the company has an independent legal personality. According to the purpose and characteristics of the behavior, it can be divided into two categories: One is the establishment of subsidiary activities and preparations for opening business, which are the necessary transactions in the establishment of the company; the second is the transactions before the establishment of the company, which are related to the future business of the company, that is, non-essential transactions other than the company's initiation. behavior. The former is necessary for the establishment of a company, so there is a basis attributable to the company after establishment, while the latter is not necessary for the establishment of a company, and it does not of course have the effect of binding the company in principle. The two acts are different in nature and have different legal consequences.

(1) Necessary transactions

Establish subsidiary behavior

Subsidiary actions for the establishment of a company refer to actions incidental to the company's initiation and are also necessary for the establishment of the company. Including the establishment of the company, in order to complete the legal affairs in the establishment process, hire a law firm to issue a legal opinion, hire an accounting firm to issue a capital verification report; when the company was established, it issued an underwriting agency agreement with a securities company to issue shares, and shares Collecting banks signing collection agreements, making stock offering advertisements and other legal acts. Compared with the establishment of inherent behaviors (that is, initiating behaviors), the establishment of subsidiary behaviors is beyond the scope of the former and manifests itself in a way other than the initiators and subscribers. Third party civil and commercial contract behavior, and before the establishment of the company, the contract has been fulfilled, so for the company after the establishment, the establishment behavior mostly in the form of company establishment costs.

Preparations for opening

Foreign company legislation generally stipulates the necessary actions for the establishment of a company to complete the establishment of the company as a direct purpose. However, on the basis of this, our company law specifically stipulates that in addition to the establishment of a statutory registered capital, a company must also have "necessary places of business." "The purpose is to enable the company to be in a state of business after its establishment. Therefore, in order to enable the company to meet the requirements for establishment required by the Company Law, the company enters into a contract with a third party during the establishment process to obtain the necessary production and operating conditions. From this point of view, it is obviously not enough to set up a company in the act of restricting the establishment of a company as a direct purpose, as in foreign legislation. It is legally and economically necessary to create the necessary conditions for the establishment of a company under the Company Law. Necessary transaction behaviors should also be included, which scholars call the preparation for opening. In China, it generally includes: (1) signing a construction project contract for the establishment of a business site required by a company; (2) signing a lease contract and leasing a house; (3) acquiring land for land use rights; (4) accepting shareholder investment And registered capital investment and capital verification and opening an account, entrusting capital verification (5) to sign an employment contract with the staff, etc. The above acts are also referred to as preparations for the opening of the company and are also the main part of the company's transaction.

(2) Non-essential transactions

In addition to the necessary transactions, the initiator may also conduct transactions other than the establishment of the company, which usually refers to the behavior of the initiator to conduct business transactions with a third party in the name of the established company in order to retain business opportunities. Unlike necessary transactions, non-essential transactions are usually not or solely for the purpose of establishing a company. How to define the legal effect of this behavior?

China's company law has no clear relevant provisions. Article 3, paragraph 2 of the "Regulations on the Administration of the Registration of Companies in the People's Republic of China" states: Engage in business activities in the name. "From this we can see that at present China's law does not allow or disapprove of an entity that has not obtained an independent legal status to engage in acts that can only be performed after it has obtained the corresponding qualifications.

However, because the establishment of Chinese companies adopts a combination of standardism and administrative approval, it takes a certain period of time for the company from the signing of the sponsorship agreement by the sponsor to the formal acquisition of the business legal person's business license. During this period, The company, especially the limited liability company and the joint-stock company that initiated the establishment, often already have the three essential elements of the founder, articles of association, and capital required for its establishment, which are already the embryonic form of the company. If a suitable trading opportunity appears at this time, in a rapidly changing economic society, a suitable profit opportunity should not be missed by a rational commercial subject. And if the counterparty of the transaction is willing to act with it based on consideration of the strength and development prospects of the company under establishment, the transaction is in line with the profit principle of commercial law and the principle of swift transaction. If the law stipulates that all established companies are not allowed to engage in trading activities, the signed contract will be invalid, which will cause the established company to lose many related trading opportunities, and its economic interests will be damaged.

The goal of commercial transactions is to make full use of existing resources in pursuit of maximum economic benefits. Legislation in various countries has made transaction simplicity and speed an important principle of commercial legislation. Furthermore, commercial law also encourages transactions as one of the basic principles. The purpose is to maximize the possible use of resources to promote socio-economic interactions. For transactions with errors or defects, the greatest possible opportunity is to provide parties with remedies. Regarding the establishment of transactions outside the company in order to maintain trading opportunities, the legislation should not take a prohibited attitude, so as to provide a more favorable development environment for the established company and promote economic development. Common practice in countries with more mature commercial legislation.