Abstract: The issue of private gains from controlling power appears along with the generation of the system of corporate juridical person and is increasingly becoming a problem of corporate governance. The discussion and legislative rules concerning the private gains from the controlling power in foreign countries rarely directed towards the state-owned companies, thus the theory and experience of foreign countries used in the analysis of China’s state-owned companies are often difficult to obtain convincing conclusions. Around the problem of private gains from controlling power in China’s state-owned companies, there appear the three logical paradoxes: the inside control generated from a highly concentrated ownership structure, the incentive mechanism exacerbating the private gains from the controlling power, and the denial of the private gains from controlling power going against the corporate long-term development. Thus, these paradoxes have led Chinese state-owned companies into the predicament of corporate governance in both aspects of the concept and reality. The key to solve the problem lies in that we must face the unique nature of the Chinese state-owned companies in such aspects as the value targets, market position and so on. In legislation, no concession should be given to any private gains from controlling power generated from inside control.

Key words: state-owned companies; private gains from controlling power; inside control