On Legal System Of Enterprise Groups Take On Debt, A Subsidiary Of The Parent Company

Corporate group is a particular phenomenon where the member companies within it are closely tied with each in all levels. The rising of corporate group is a challenge to the limited liability principle, and the economic relations between the parent and subsidiary companies make it necessary to disregard the limited liability of parent company in extreme circumstances. From the perspective of comparative law, in Anglo-Saxon legal system, there is no special regulation with regard to corporate group. Instead, the principle of "piercing the corporate veil", dealing with shareholder and company relations, has been applied to internal relations within the corporate group. The principle emphasizes the inappropriate control of parent company over the subsidiary company as the fundamental reason to negate the limited liability principle. German law takes the corporate group as a kind of special organization (but not independent legal entity). The special law of Konzernrecht regulates the relation of member within corporate group. As long as a corporate group is classified as a Konzern, the liabilities of the parent company can be negated. And then, this thesis construes the legal and economic value of limited liability as a balance of interest between shareholder and creditor. If such balance is broken under certain circumstances, the limited liability shallbe negated in such ones. Finally, this thesis takes the parent company's inappropriate manipulation over the subsidiary as the cause for holding the parent liable for the obligations of the subsidiary.