On The Legal System One Man Company And The Principle Of Corporate Personality Negation

A single person company is a kind of Special Corporation developed in the 20th century, which means the company's share or capitalization will all belong to the sole shareholder corporation. It was in the form of a kind of fact but illegal company at the very first. Because a single person company set up a mode of operating venture, avoided disputations among shareholder inside the company, brought convenient to run the company flexibly, sustained the development of the enterprise, then, from the British company Salome established a single person company in 1897, there were many countries affirmed a single person company's position in law in the form of case law or legislation.Our country's Company Law added special rules about the single person limited liability company. As the single person company developed in the legislation, the appearance of a single person company aroused many new problems in theory and practical field of Company Law. Among them, the question of the creditor's legal protection issue is the most outstanding. The author started with the summarize of a single person company, discussed the necessary of the principle of disregard of corporate personality's applicable in a single person company step by step, through analyzing the applicable situation and condition of the disregard of corporate personality, tried to connect the theories of the disregard of corporate personality in general and itemize rules in the Company Law and the applicable of a single person company, set up a wall of avoiding the corporate personality and limited liability be over used by one share holder, realized the correction and supplementary to the absolutely principle of disregard of corporate personality in valid. By enhancing and highlighting the research of disregard of corporate personality in a single person company, realized the interaction between disregard of corporate personality theory and limited liability rules, composed a frame of share holder liability mode in a single person company. Meanwhile, through analyzed the regulation to the legislation of a single person company in our country's Company Law, discussed when a share holder in a single person company use its veil to make benefit to himself, impaired creditor's legal benefit, how to use the disregard of corporate personality theory to protect creditor and the public's legal benefit, which is also the main point of this dissertation.In the first part, the author states the necessity of legal rules on a single person company. Although law in many countries admitted the legal position of a single person company, the dispute of whether to abolish a single person company never stopped. The main reasons are a single person company has flaws itself and it as a dissimilation pattern pounded against the traditional Company Law view strongly. The existence of a single person company disturbed the normal operation of the traditional company, make it easy to the share holder using corporate personality and impaired creditor's benefit, bring disadvantageous to the development of non-limited liability companies such as Individual Solely-Funded Enterprise at the same time. The existence of a single person company will also waver many concepts in the traditional Company Law, which may let the rules like capital decided by most opinions, director and manager liability etc. in useless. So, we should borrow the advanced legislation cases from abroad; take effective steps to regulate a single person company in law, so as to guarantee the very development of a single person company.In the second part, the author states the issue about whether a single person company applicable to the disregard of corporate personality regulation. The disregard of corporate personality regulation operating as a method afterwards has normalized a single person company effectively. It accompanied with the limited liability principle become the core concept of modern company system. Meanwhile, it also avoids the harm of investor's enthusiasm on establishing a single person company as a method afterwards, not only support the benefit of creditor, but also protect the safety transaction. The more important is that a single person company encourages the investment industry. In this part, the author clear and definite the prerequisite of whether a single person company applicable to the disregard of corporate personality regulation, which is the share holder and corporate personality blended into one, the short of company capital as well as improper using the corporate personality in order to cheat in law and escape from debt. At last, the author states the specialty and limitation of the disregard of corporate personality regulation in a single person company.The third part is the key point in this dissertation, mainly presents the disregard of corporate personality regulation in a single person company in our country and proposed the opinion consummated. The Company Law revised in 2005 brought in a single person company's rule and disregard of corporate personality regulation, which may be called"the repeated calling and urging beginning comes out". We may say this procedure complied with the time need to develop also conforms to the economic law objectively, meanwhile, the legislator looked after the specialties when single person company use the disregard of corporate personality regulation, which is a big leap in our country's corporation legislation.As far as China Company Law concerned, the disregard of corporate personality principle has been partly included in; however, it does not play a very important role in our company law system by lack of means. What the principle involved only focus on the sole legal relation in certain single case without any detail consideration of regulation. It is the only reason that the principle can exist as the method to be used by the Judge in Court which has been considered as certain filling to cover the flaw and loophole in the statute system. Unfortunately, the judge sometimes will free to take judicial discretion regarding to abusing corporate personality case. To some extent, whether the principle would be accepted by the Judge or not will depend on the capacity of the Judge besides those evidence provided by the shareholders. From this point of view, the author will give some means as following to solve it out,.The Judge not only have to convert the duty of giving the necessary evidence to the shareholders but also must performs the details of application of the principle including suitable content and the procedure.It will be helpful to define the principle context and prerequisite and legal procedure which will clarify the judicial interpretation of certain regulation.The disregard of corporate personality principle and the limited liability principle compose the core concept of the modern company system as the counterpart. The limited liability principle plays such an active role for protecting the utmost good faith shareholder and it makes the investor feel peaceful to set up a new company to avoid huge lost for negligence. But the disregard of corporate personality principle is warning the shareholder, specially regarding to certain investors, which means the abuse of the priority position of the principle will lead to such a serious negative result. The principle has been created hundreds years later than the company system but it still plays very important pole for reasonable using the limited liability principle.