Research On Defects And Perfection Of The Limited Liability System

Limited liability system is an important system in the field of civil and commercial law,which is called a traditional cornerstone of corporation law. And it is the basis of corporation system, many rules in corporation law are mainly determined by limited liability system. The merits upon its formation and development must be seen in the field of mobilizing the initiative of potential investor, developing economies of scale and promoting the corporate legal system to completion. However, it can easily be used to evade law and legal duty ,which brings about the problem of misusing the limited liability and does seriously harm to interests of creditors. For the above reasons, this article wants to make the systematic research on the defect of limited liability system and its correlative problem in order to make some contribution to perfect our limited liability system.The whole article is divided into three chapters. The first chapter makes an exploration on limited liability system from its implication,characters,trend and so on. It concludes that the centre of doctrine of limited liability is the principle that a company assumes the corporate personality independent of its members, and shareholders assume the companies'responsibilities by the number of their invested money and held shares, while the companies assume their debt responsibilities by their whole property. As an investor, the shareholder may not be liable for the debt beyond the paid fund upon incorporation. Furthermore, the generation of exception application of the limited liability system is the trend of corporation limited liability system. The second chapter makes the comprehensive evaluation on limited liability system that it brings its function into play but there may exist serious defects in limited liability system at the same time. That is to say, limited liability system can decrease and transform risks, encourage investment, cut down dealing expense and managerial costs, promoting the effective development and expansion of corporations. But there exist some defects in limited liability system at the same time ,for example, it can easily be used to evade legal duty by shareholders ,and does possibly harm to interests of creditors and employees. The third chapter author puts forward some immature suggestion with purpose of casting a brisk to attract the jade. Author proposes that ,on the one hand, we may perfect the limited liability system through related provisions of the corporation law ; On the other hand, our country legislature should refer to the west country's successful experience ,using the theory of"Piercing the corporation's veil",and the exception application of the limited liability system should be set up in order to perfect and supplement our limited liability system.