The Disregard Of Corporate Personality Applicable

What is the legal personality of a company? Is it a consequence of law-making or relationship lease? What are the characteristics of the legal personality? Answering all these questions is the prerequisute to decide the disregard of the corporate entity. There are two different definations for it. One is that a company is a money-oriented legal personality established according to certain laws. The essence of a company consists of independent personality, a unit combined personally and benefit-oriented.Lega personality of a company refers to the capacity and civilpower entitled to it and the civil obligations. Its external characteristics are: the individual name of the company, the independent possession of the company and the union and structures of its own. In addition, the company can do its business on its own and take its own civil obligations. And the company must be established according to laws.Another important nature of a company is the limited liability ofr its owners, which is a corner stone of the company law. There are two types of limited liabilities : One is stipulated by law or contracts,while the other is made by company law.The negatigve effects of limited liability for its owners are: It offers a chance to earn illegal benefits mainly for its owners whereas the creditors of the company can't get equal compensation. So it is necessary to set up a new system—Disregard of corporate personality—to keep balance.Disregard of corporate personality can be understood as followings:It is only an exception rule instead of a common one;It is not a total denial of limited liability for its owners, but a modification of the absolutiztion of separate existence of personality and limited liability for its owners. The main functions of the disregard of corporate personality are to balance the interest between the owners and creditors by modifying certain cases,to adjust the interest deviation caused by the system of limited liability for its owners, to keep peace and justice by taking responsibility due to misuse corporate personality. A company must have the independent legal personality.Disregard of corporate personality is a necessary and useful complement for legal personality. It is the further development of legal personality. But it only occurs in the certain cases and can't be overused. And it can only be applied by sueing.There are four conditions which ensure that one can use the Disregard of corporate personality: 1. the establishment of a company which is a prerequisute; overuse of the legal personality of a company which is the main point; the practical overuse of corporate legal personality which is the action and the damagement made by overusing legal personality which is the result.There is a sense to analyse the different situations and styles of corporate legal personality through different aspects of reality, theory and integrations.Theoretically, there are seven types of disregard of corporate personality; legistrationally, there are four types of situations which are adjust to this system; and there are four kinds of cases which are adjust to "overuse of corporate personality" from the aspect of legal personality of company.