Civil Liability Of Control Companies In Related Enterprises

Related enterprises are the result of the development of modern corporate system. Related enterprises have absolute advantage over the other company forms. They can reduce transaction cost and time, overcome tariff and non-tariff barriers of host countries. Businesses often use this kind of company form. In consideration of the independent corporate status of control companies and subsidiary companies in the related enterprises, they keep subsidiary companies under the command of control companies, but this may bring about loss of subsidiary companies, shareholders and creditors. On the other hand, control companies do not have to take any legal responsibility for this loss. In order to effectively prevent this illegal act under the cover of the legal form and force control companies to take civil liability, the author read a lot of books and articles on this subject. She uses such research methods as dialectics, comparison and case study in an attempt to expound the legal principle of civil liability which control companies must take for the abuse of control power. She also describes the laws of some countries under the common and code law systems in dealing with legal liability control companies take in related enterprises. In this thesis the author analyses the advantages and disadvantages of China's law in this respect. She puts forward some constructive suggestions in an effort to protect the interests of subsidiary companies, shareholders and creditors.