Associated Companies Companies Regulatory System

The affiliated enterprise is the union being composed of many independent juridical persons. The first, the affiliated enterprise represents an enterprise union, such as group of enterprises, kozern, transnational corporate. The member enterprises remain independent legally, but they have lost the independence in economy. The second, the affiliated enterprise constitutes by invest, such as reciprocal invest or cross-hold, like parent company-subsidiary company. In addition, the contract of enterprises is the measure to build up an affiliated enterprise. The third, the members of the affiliated enterprise must be independent juridical persons in legitimacy. The last, the affiliated enterprise is established for economic benefit. Generally speaking, the affiliated enterprise is always hankering for the scale effect in order to meet the demand to development of marker economy and socialization manufacture. The economic motivation of affiliated enterprise is various, such as monopolizing market, avoiding venture, depressing cost, seeking cooperation, tax evasion, or boosting up competition. In the law's opinion, its motivation is achieving the effect that one enterprise controls the others by various meas.As a new economic offspring, the coming of affiliated enterprise is a large challenge to the legislation. In current company law, the independence of company juridical persons roots in its economic independence. And in this condition, the companies', the obligees' and the shareholders' interest is accordant. While a company becomes the member of the affiliated enterprise and loss its economic independence, the relatively accordant interest system is broken. This text will analyze the relation and interest conflict of the affiliated enterprise, will try to seek the interest balance between the controlling companies and the controlled companies, and will concern with the problems of protection of the controlled companies, their obligees and minority shareholders.This text consists of four parts.Part I The Affiliated Enterprise's Definition, Law Characters, Interior Relations and Exterior Forms expatiates the characters of the affiliated enterprise based on the its definition, distinguishes its interior relation, and induces its exterior forms.Part II The Challenge to Current Company Legislation analyzes the problem of the affiliated enterprise and its correlative bodies based on the current company law. At the same time, it raises some problems, such as the interest protection of the controlledcompanies, their obligees and minority shareholders, false investment, directors controlling themselves companies.Partlll The Restriction to The Affiliated Enterprise in Company Legislation uses for reference the legislation system of developed nations in affiliated enterprise, such as Piercing the Corporate Veil, Deep-Rock Doctrine, Fiduciary Duties of the Controlling Shareholder, Shareholder's derivative litigation, and Countervail forbiddance, and raises my opinions.PartIV The Current Legislation and Modification to Affiliated Enterprise in Our Nation enumerates and analyzes the rules of the current legislation on affiliated enterprise in our nation. At last, the author will make some suggestion to our nation's affiliated enterprise legislation.