On The Introduction Of Deep-Rock Doctrine In China

"Deep Rock Doctrine"was originated from a judicial precedent in U.S.A. If the controlling company manages to be the creditor of the subsidiary company by improper means which of course break the good faith as a shareholder, the controlling company's credit will lie behind the other creditors of the subsidiary company to be paid when the subsidiary goes bankruptcy. The doctrine is significant for us to deal with the problems of the controlling company getting the assets and damaging the interests of obligees of the subsidiary company by obligatory way. It embodies the essence of the equitable principle of obligatory rights. At the same time, comparing with the disregarding of corporate personality, although the evidential burden in Deep-rock Doctrine is not important, but the doctrine balances the interests of shareholders, obligees, and the society from different levels and aspects.At present, the research on the protection of obligees of the subsidiary company in China does not focus on Deep-rock Doctrine but the disregarding of corporate personality. The new Company Law and Bankruptcy Law do not consist of this doctrine.The present rules and regulations in China can not protect the interests of obligees properly, what'worse, there are unjust cases in the justice practice. The regulation draft about hearing the disputes of companies of Supreme Court introduces Deep-rock Doctrine, but the legislation's level is low and unfeasible. Therefore, in order to make the doctrine effective we must improve the legislation level, make the rules clear and specific, such as, the principle, the object, the condition and the legal effect.