NCJ Number
63512
Date Published
1979
Length
114 pages
Annotation
AN INVESTIGATIVE COMMITTEE OF SWEDEN'S CRIME PREVENTION COUNCIL EXAMINED THE LAW ON CORPORATIONS AND WHITE-COLLAR CRIME ACTIVITY IN THE CORPORATE FIELD. THIS REPORT INCLUDES THEIR FINDINGS AND SUGGESTIONS FOR LAW REVISION, PARTICULARLY IN THE AREA OF LIQUIDATION AND BANKRUPTCY.
Abstract
SINCE A CORPORATION'S INDIVIDUAL SHAREHOLDERS CANNOT BE HELD RESPONSIBLE FOR THE CORPORATION'S DEBTS, THE COMPANY'S BOUND CAPITAL IS THE CREDITOR'S ASSURANCE OF PAYMENT. IF A COMPANY LOSES MONEY, HOWEVER, THIS LOSS IS EXPRESSED AS A LOSS OF ASSETS OR CAPITAL. WHEN A CORPORATION'S CAPITAL HAS SHRUNK BY MORE THAN TWO-THIRDS, SWEDISH LAW REQUIRES THE COMPANY TO LIQUIDATE. THE CORPORATION'S CAPITAL MAY OR MAY NOT BE SUFFICIENT TO COVER THE COMPANY'S DEBTS AT LIQUIDATION. THE INVESTIGATIVE COMMITTEE HAS FOUND THAT SOME CORPORATIONS ARE ALLOWING THEIR LOSSES TO ACCUMULATE TO THE TWO-THIRDS POINT IN ORDER TO AVOID PAYING ON DEBTS THAT CANNOT BE COVERED WITH THE CORPORATION'S CAPITAL. THESE CORPORATIONS MIGHT THEN CHANGE NAMES AND RESUME BUSINESS. OTHER COMPANIES ARE CHANGING NAMES OR LOCATIONS IN ORDER TO AVOID CREDITORS OR THE OBLIGATION TO LIQUIDATE IF LOSSES ARE GREAT. THE COMMITTEE PROPOSES THAT THE LAWS ON LIQUIDATION BE TIGHTENED TO REQUIRE LIQUIDATION WHILE THE COMPANY'S ASSETS ARE SUFFICIENT TO COVER ITS DEBTS. IT ALSO RECOMMENDS THAT STRICT CONTROL BE KEPT OVER CORPORATIONS IN DANGER OF LIQUIDATION, THAT CORPORATIONS BE REQUIRED TO PROVE A NEED TO CHANGE LOCATION OR NAME, AND THAT CORPORATIONS BE OBLIGATED TO SUBMIT A REPORT OF CORPORATE MEETING ACTIVITY ALONG WITH THEIR YEARLY AUDIT. FINALLY, THE COMMITTEE PROPOSES THAT OBLIGATORY REGISTRATION OF CORPORATIONS BE INITIATED.