On Institutional Puzzle Of Limited Liability

The limited liability of the shareholder system derived from the the response of the legislation to the needs of economical development.After several hundred years evolution and the fusion,the shareholder limited liability system already became the cornerstone of the modern corporation law.Says from the function,on the one hand,the limited liability system causes the shareholder personal property to exempt from the company creditors;on the other hand,"the entity protection" causes the company property to exempt from the creditors of shareholder personal.The function of "the property division" has already stimulated the enthusiasm which the shareholder invests,completes the capital for the socialized big production to gather,simultaneously reduced the transaction cost effectively.As well as affirmation that limited liability system is efficient, It is also not allow to neglect.What The limited liability system produces the moral risk and exterior problems is inevitable,this causes the limited liability system to just like a double-edged sword:The investor brandishes this handle sharp weapon to capture the income heartily,meanwhile threats the social justice.From the experience observers,the history of abusing with the limited liability is accompanies nearly with the development of history of limited liability system.In the view of the limited liability system's insufficiency and flaw,for reducing the negative influence which the limited liability system institute possibly produced,the various countries all separately have carried on the theory construction and the practice exploration to the limited liability system revision.Among those,the biggest Influence and the broadest applicable scope belongs to the theory of "piercing the company veil" and "Konzeren".This article discussed the reform approaches of limited liability on the foundation of summarizing the already theory and the practice achievements.This article believed,When there existing the controlled shareholders in the company,the limited liability protection givern to the controlling shareholders is based on exercising reasonably company domination,this is different from the traditional base that the shareholder and the company should maintain the strict separation between each other.This article advocated that the protection of limited liability would be deprived when the controlling shareholders abuse the controlling power in the company under the "abuse theory".Through the unctional anylisys of the proportionally unlimited liability scheme,this paper proposed that,facing the non-voluntary creditor,the proportionally unlimited liability is able to achieve the efficiency and fairness.This article also proposed that there are interest conflicts among the subsidiary company creditor,superior shareholders and holding company when the subsidiary goes into bankrupt.In order to delete the unfairness in the order of claims to different creditors,including the holding company,our country should introduce the "deep rock theory".The full text is composed of six chapters,untilizing the methods of legal science and the economics.Chapter 1 deals with the observation of limited liability system puzzled history.Chapter 2 shows the theoretical analysis on the institutional puzzle of limited liability.Chapter 3 explains the limited liability system puzzled theory and the practice exploration. Chapter 4 focuses on the reinspection of unlimited liability.Chapter 5 uses contractual theory to explain the institutional puzzle of limited liability. Chapter 6 explores the institutional improvement in the future.