Research On The Civil Responsibility Of Parent Company And Subsidiary

The global trend of international production and economic development brings up innumerable company groups with the basic structure of parent company and subsidiary. The concept of parent company and subsidiary has been penetrated into each corner of economic life and has been focused by jurisconsults as well. Because governance mode of parent company and subsidiary is existed in apparent negative effect, namely, interest of subsidiary is damaged for wrong control of parent company, and then achievement of legitimate rights and interests of subsidiary will be affected accordingly. Therefore, it is full of significant realistic meanings to research on the civil responsibility of parent company and subsidiary. Correlative explanations of the text are the superficial attempt for such a problem hereinbefore.The text is classified to be six chapters.Chapter is mainly to put forward the importance and feasibility for researching on the civil responsibility of parent company and subsidiary---the problem that is needed to be proved in the text. It is considered that such potential abuses are existed in structure of parent company and subsidiary as particularity of shareholders'statuses, antinomy for independence and control of subsidiary, inherent flaws of limited liability, etc. through making analysis for advantages and disadvantages and gains and losses of governance mode of parent company and subsidiary and reconsidering rationality of limited liability of parent company which controls shareholders based on understanding universality and importance of structure of parent company and subsidiary within scope of the world; further analysis should be made on such legal measures that may be adopted, namely, special legal liability shall be inflicted for parent company so as to correct justice and right deviated from routine orbit.Chapter two is to expatiate on legal cognizance and characteristics of its parent company on emphases. Integrated with each country's cognizance on parent company in the world, the approach on structure of parent company is composed of three varieties: they are approach of capital (share), approach on corporate cooperation (contract) and other approaches. It is mainly to structure company group with patent of parent company and subsidiary through approach of capital, contract and other approaches are involved sometimes in China. The core factor is control for no matter how the parent company and subsidiary is instructed by means of which approach, no matter how many quantities of shares held and no matter whether the contract of control or exchange of interest is or not. It won't be known where to begin without control. Therefore, it is considered that the essence of parent company and subsidiary is share holding/contract and plus control; some explanations are given in the text as for common meanings of each county's control on company in the world and relevant provisions of China's control on company.Chapter three is to research on basis of legal principle and theory of civil responsibility that is undertook by parent company mostly. Looking over research on legal principle and theory of companies in each country of the world, it is especially emphasized on theory of faithful and reliable obligation originated from method of entrustment, which shall be expanded to field of law of company. Such subjects who undertook faithful and reliable obligation include directors, holding shareholders and parent company, whose obligation objectives are the company, other feeble shareholders and creditor of its subsidiary. To speak in details, faithful and reliable obligation of parent company includes obligations of attention and loyalty, whose contents of obligation constituted extremely limitation on behavior of parent company. Meanwhile, relatively detailed explanations are given in the text as for basis of legal principle and theory for parent company to undertake faithful and reliable obligation, including theory on relationship of entrustment, theory on advantageous status, theory on equity and right, theory on restriction of influence, etc., which are important.Chapter four is to discuss the detailed mode on the civil responsibility undertook by parent company importantly. Looking at research fruits of jurisconsults in the world, the opinions should be differed from each other as for how the parent company who controls shareholders undertakes the civil responsibility and how much scope of the civil responsibility should be undertook by the parent company. England-U.S.A Case Law took the lead in establishing the disclosure on veil system of company (namely denial of personality of Company Law), such a system has been introduced into by Japan, Germany, etc., which has been developed further. As extension of disclosure on veil system of company, such principles as balance and inferiorly and essential merger are applied in justice practice of America as well. However, principle and uncertainty of applicable conditions, the biggest defect of the series system, brings bout obstacle for practice of justice. Whereas, Germany and Taiwan of China pushed the method"Law of Connected (or Relationship) Enterprise", namely, to make centralized list on relevant criterions involved in parent company, so as to be operational much more. It is another rare and beautiful flower in the system on the civil responsibility of parent company and subsidiary.Chapter five is to make further and detailed research on the type and constitutive requirements of the civil responsibility undertook by parent company and achievement of creditor's rights based on chapter four. As far as the characteristics of the civil responsibility for creditor of subsidiary undertook by parent company is concerned, it shall be subjected to responsibility of right infringement. Because responsibility of parent company is legal responsibility in one hand, and relativity of contract is unable to be resolved in event that it is applicable to responsibility of contract in another hand. Therefore, constitutive requirements of the civil responsibility of parent company should be researched based on common principle of constitutive requirements for responsibility of right infringement and combined with details of parent company and subsidiary, of which the constitutive requirements include violation of faithful and reliable obligation, malfeasant action of control, occurrence of aftermath on damage of interest of subsidiary, and the causality between malfeasant action of control of parent company and aftermath on damage of interest of subsidiary as well. In aspect of cognizance for causality, legislation pattern of Germany"Presumption of Connected Relations"gives the people a new edification. It should be given attention, analysis and research on details of the civil responsibility undertook by parent company for being related to the extent for creditor of the company to achieve the right for claim for compensation, for example, subject of responsibility, content of responsibility, mode of lawsuit, responsibility of evidence presentation, period of time for institution of compensation, etc.Chapter six is to compose the starting point of the text, namely, to make foreign things serve China and benefit for the country. Where the defect lies in should be analyzed through the analysis for the civil responsibility system of China's parent company and subsidiary. Generally speaking, corporate system of China has been established basically, and the company group with the basic structure of the parent company and subsidiary is now developing vigorously; however, the system on the civil responsibility system of the parent company and subsidiary has not be set up as a whole. It is not provided with the effect of giving extended applications although limited liability of shareholder is occasionally broke through in justice practice. It is crying for us to regulate relevant problems relating to the civil responsibility of parent company and subsidiary in real life. Therefore, it should use methods from such countries as England, America, Germany, etc. for reference to establish the system on the civil responsibility of the parent company subsidiary provided with characteristics of China in line with the spirit of"Principle of Bringing".