Analysis Of Application Of Personality Negative System Of Corporation In China

The new revised Company Act dated on 27 Oct. 2005 has formally determined personality negative system of corporation in China. However, the system has not been attached with definite legal provisions or judicial explanation resulting in difficulties in judicial practice which requiring a detailed specification for the application of personality negative system of corporation in China. Therefore, the text hereby analyzes the application of personality negative system of corporation in China based on actual requirements. For the mode of legislation, it is suggested that a principle regulations to be made while the detailed applied situation and conditions are specified further in judicial explanation; regarding the applied situation, give four kinds of examples as shortage of capital, mixing of company, property of shareholders, business and personality, avoid the liability of contract and legal liability using of company personality; when making judgment, such three parts as main body, action and results have to be considered. The voluntary creditor and forced creditor consists of prosecutor, those person who abuses the force of company is the defendant who has the act of abusing company personally resulting in bad effect; the responsibility of producing of evident may refer to those of courts of Germany, which is proved by prosecutor, after that, the defendant provides the evident that he has a proper action for the suit of company or his action is not the direct cause for the loss of company; the legal effect of disregarding of corporate personality is to deprive the rights of limited liability of shareholders and shall undertake the affiliated liability according to different situations of company debts, however, it is clear that the legal effect is only limited to the special legal relationship in the specific case; the exercising body is made by court while the corporate personality might not be disaffirmed directly in exerting process; finally, it points out the real essence and also its real sense and difficulties in practice. The text is composed of the following five parts:1. Preface analyzes the shortcoming of legislation of personality negative system of corporation in China resulting in abusing of power of judicatory. It points out the detailed specification of application of personality negative system of corporation in China so that to reveal the purpose and actual meaning of the text.2. The second part analyzes the intention and legal characteristic of personality negative system of corporation in China, which revealing the system is not a disaffirmation of system of corporate personality but a necessary supplement and improvement of the corporate personality system.3. The third part describes the legislation and judicial practice of four counties as USA, UK, Germany and Japan and introduces relevant theory and practical of USA aiming to provide an experience use for reference.4. The fourth part is an reflection of improvement of personality negative system of corporation in China. It carry out the analysis on such aspects as legislation mode, applied situation, structural parts, evidence liability, legal effect, excising effect, excising body and revealing company essence reversely.5. The fifth part is the conclusion, which indicates personality negative system of corporation is a necessary and beneficial supplementary which shall be used carefully. Besides, the definite judicial explanation shall be determined for application of personality negative system of corporation so that to normalize the executing action of judicial officers.