Legal Regulation Of The Parent-subsidiary Relationship

The emergence of the parent company and subsidiary company is the result of the development of Times.Since the middle of last century,the worldwide market competition becomes increasingly fierce, the company groups trend unstoppable. Limited liability and independent personality has been the most main feature since this form of enterprise birth.it is this feature that enables the company a unique advantage. And the form of parent company and subsidiary company can make the parent company to control more subsidiary and even sub-subsidiary by less capital,so as to make the company become a large enterprise group.The expansion of the scale of company brings great benefits, and also places it in incomparable advantage in the competition, reflects its economic value goal.The relationship of parent company and subsidiary company is like two sides of the same coin,.It has its unique advantages, also has its drawbacks which make the laws of the regulation of necessity. As mentioned in the paper, Delong group and the Monkey King group and Si Kao Le group their subsidiaries in the control of the improper behavior led to the overall interests of the damaged subsidiary, the subsidiary of the bankruptcy or frequency bankruptcy position.It's well known that these holding the parent company to its subsidiary abuse of the behavior of the control was created, if we don't control these abused actions,the entire market economy will be an unimaginable trauma, difficult to assurance subsidiary of the interests of small and medium shareholders. Foreign the legal regulating the relationship of between parent company and subsidiary company mainly includes the limit of the parent company, a powerful position;the subsidiary company, and a few of the shareholder rights protection and the creditors of the subsidiary company protection, etc.The parent company as the controlling shareholders have the obligation of good faith, and subsidiary and minority shareholder derivative action in accordance with the shareholders may be systems to protect their own rights and interests.For the banned of related transaction in some degree restraint the parent company. Fairness and justice idea is congealing the human spirit and method of faith about law, opened the principle of the veil manifests people's the pursuit.In China, the relationship between parent and subsidiary companies also has an important significance.The new "law of corporation" played an important role to the healthy development of the relationship between parent and subsidiary companies, but with the theoretical study of the gradual deepening and the application in practice, or emerging such as unfair related-transactions, the controlling shareholders excessive control, protecting the rights of small and medium shareholders maneuverability is not strong, the medium and small shareholders through the litigation maintenance rights of the maintenance of their difficulty. This needs to do further research according to practice to the subsidiary company of related theories.After summarizing exiting questions in the reality, author puts forward such as establishing chapter in the "company law" for the relationship between a parent company and subsidiary company and their concept, perfecting the system of the obligation of good faith of controlling shareholders, the improvement of the system of shareholder derivative action and so on specific legislative proposals, for the Chinese parent company and subsidiary company to perfect the system of the design of the proper institutional framework.The dissertation consists of four chapters besides a preface:In Chapter I, the legal definition of parent company and subsidiary company, the control form of between the parent company and the subsidiary company are reviewed,and comparingparent company and subsidiary company to other related concept in the company law is to show the differences between them.In Chapter II, features and forms of the legal relation between parent and subsidiary companies are analyzed,which forms in particular have kind of three,namely between parent and subsidiary companies of the internal management control relations,external legal relationship and its parent company, a wholly owned subsidiary of the legal relationship.In Chapter III,Through to the Monkey King group, Delong group, Si Kao Le company, bankruptcy or frequency the bankruptcy cases analysis, to illustrate the unfair control behavior of The parent company to the subsidiary company is the main reason leading to these results.And arguing for the reason for the existence of the control behavior and its disadvantages.Finally to sum up the unfair control behavior forms of expression.In Chapter IV arid V, Separately from perfecting the system of the shareholders' committee and the board of the directors, and regulating connected transactions between the parent company the subsidiary company, two perspectives are to protect the subsidiary company independent legal person qualification interests so as to regulate the legal relationships between parent and subsidiary companies.