Company promoters play an indispensable role in the formation of a company. With companies as a form of business vehicle becoming increasingly popular in China, a law which clearly delineates the rights and legal obligations of promoters is much needed. The Chinese Company Law (CCL) is the major law regulating the legal position of promoters with regard to incorporation activities in China. However, despite its substantial revision in 2005, the CCLs provisions on promoters are still unsatisfactory. In particular, the CCL focuses largely on the capital contribution aspect of promoters, but has laid down few guidelines on other prominent issues such as the secret profit of promoters and their liability regarding pre-incorporation contracts. By adopting a comparative approach, this paper examines the CCLs framework that governs company promoters and suggests how it can be reformed to better prevent fraud and achieve justice. Copyright © 2009 Hong Kong Law Journal Ltd.
|Hong Kong Law Journal
|Published - 2009