Under these conditions external guaranty is apt to be the means by which the major shareholder or insider tunnel the listed companies,and deteriorate the corporate financial condition.

At present, China s listed company s external guaranty is very popular.

The Guarantee of Listed Companies:A Perspective of Ownership Structure;

Listed company external guarantee means listed company as the guarantor put guarantees for other market players debt and credit activities, but also includes personal debt guarantees.

Lack of efficient governance of listed companies and perfecting of related laws, the unreasonable the ownership of a share construction is and so on, the guarantee behavior has some features including the following aspects: more and more listed companies involve in guarantee; many guarantees violate the rules.

The paper selects all the external guarantee behaviors of listed A-share companies from 2001-2004 as the research sample.

The act of external Guarantee of listed companies is ubiquitous in business of China.

Paragraph 1,Article 16 of the“Company Law”has given greater freedom to the company s external security,but it is ambiguous for the provisions beyond the scope of the company s external security.

Notice on External Security by Listed Companies jointly promulgated by CSRC and CBRC replaced relevant provisions previously stipulated by CSRC as official rules to guide external security by listed companies.

In the early times, for protecting of the investor s interests, the company s external security is strictly restricted.