Protection of creditors in establishment of joint stock companies

Joint stock companies can be established from large capitals by bringing together small savings. One of the joint stock companies' main features is that the shareholders are only liable against the company and only the amount that they committed. The situation known as limited liability is an advantage for shareholders, on the other hand it creates a disadvantage for creditors' point of view and creditors cannot apply to shareholders for their debts. For this reason, there is a necessity arose for protection of the creditors. Particularly legal capital system which considered as the baseline of the joint stock company creditors, capital maintenance principle and minimum capital terms are still discussed today. Furthermore, it is discussed too that is it necessary to protect creditors by law. Nevertheless, in the existing legislative regulations there are a few regulations for direct or indirect protection of the creditor in the establishment phase as in the operating phase. Terms related with both the provision of capital and the company founders' liability for their operations against either creditors or shareholders are ensuring that the establishment completed healthy. Thus, it is important to settle regulations related with the establishment of joint stock companies in favour of protection of creditors in order to provide legal and business confidence.