A Study On Our Country's Corporate Personality Disregard Mechanism

Although our current Corporate Law has established the corporate personality disregard system, the stipulation is comparatively abstract, i.e., not concrete, since the law has not stipulated the constituent factors of the corporate personality disregard and the proceedings, etc. In juridical practice, there are many special problems to study and solve as yet, such as who can file a lawsuit, who is the appropriate defendant, the burden of proof, civil liability and the application of law etc. Therefore, to strengthen the study on the corporate personality disregard system, is of theoretical and reality importance to safeguarding the parties' lawful rights and interests, and improving our judicial system.In this dissertation, combining the connotation of our country's corporate personality disregard system with the judicial practice, the author probes into the constituent factors of our corporate personality disregard system, the suit mechanism, the methods of bearing civil liability, and the related law application problems, etc, mainly using the substantive analysis method.This dissertation contains four chapters.In chapter one ,the author mainly analyzes the connotation and feature of the corporate personality disregard system, then he studies the constituent factors of our country's corporate personality disregard system, mainly consisting of five factors: the first is the subject factor, including both the party abusing the right of the corporate personality, and the party being sufferer a loss thereafter. The second is the subjective factor, the defendant should have the intention to abuse the shareholders' right, and the fault should not be the subjective factor. And the third is the behavior factor, which means, the defendant abuses the limited liability unlawfully breaching the principle of justice and equality. The fourth is the result factor, the abusing behavior must have caused the serious loss to other people or society. and the fifth is the causation factor, the abusing behavior and the loss thereafter should have the direct causation relationship.In chapter two, the author puts stress on the suit mechanism of our corporate personality disregard system. As to the parties, the author regards that, the corporation and its shareholders cannot be a plaintiff to file an action of corporate personality disregard, and only the corporation's creditor(s) can be qualified as a plaintiff, and that, the corporation and its shareholders who abuse its corporate personality should be the common defendants, neither the corporation nor its shareholder(s) can be the defendant. As to the jurisdiction, in order to safeguard the judgment quality, the author maintains that, this kind of case should be under jurisdiction as a court of first instance by the intermediate people's court where the corporation has been located. With regard to the method of bearing proof in the corporate personality disregard lawsuit, the author maintains that, we should establish a scientific and reasonable system of distribution of burden of proof, neither in the general principle(i.e., whoever maintains should bear the burden of proof. ) nor in the special principle of the distribution of the burden of proof(i.e., inverting the burden of proof.).Firstly, the plaintiff should bear the original burden of proof, at least proving that, the defendant has abused the right of corporate personality, and has caused its own loss thereof. Secondly, the court deduce from the original evidence offered by the plaintiff that the defendant should have fault and has abused the corporate personality. And finally, the burden of proof should be inverted, that is, the defendant should bear all the burden of proof. And we should limit the broadening of the force of ruling in pursuant to the specific legal stipulation.The third chapter is mainly on the method of bearing of civil liability. The author regards that, we should decide whether the shareholder(s) who abuse(s) the corporate legality should bear the joint liability or complementary liability or else, in accordance with a specific case.In chapter four, the author analyzes the related application of law problem in our corporate legality disregard system. He argues that, we should stipulate clearly in the law and its judicial interpretation, as to whether article 20(3) of the current Corporate law of P.R.C, and article 80 and 81 of Some Provisions on the Execution Wok enacted by the Supreme People's Court should be applied while the actual controller(s) and implied shareholder(s) infringe upon the interests of creditors by abusing the independence of corporate legality status.