On The Personality Of The One-man Company Denied That

One-man company is an important section of company law system. At the beginning of the company institution development, one-man company had not been regulated by company law because of the limitations of the traditional theory that "companies are associations". However, along as the development of economic society and the reality that one-man company is getting stronger and stronger, countries over the world decide to use company law to regulate one-man company, including our country. On Jan. 1st 2006, China admitted one-man company institution officially through the new enacted Company Law.Company Law Clause 58 says: One-man company means this limited liability company only has single natural individual or just one corporate shareholder. For a long time, our country had always being hesitated to admit one-man company, considering protecting the benefit of the creditor. On the one hand, the limited company has an important creature that is finiteness. It means company's debt only can be paid by its property, so the creditor's benefit cannot obtain the effective safeguard completely. On the other hand, one-man company has only one shareholder and its property right structure is very simplified. This may cause traditional balance mechanism of the company interior management cannot be effected. Therefore, it is so easy to make the shareholder's property and the company asset confused. When the shareholder's personal interest and creditor's benefit has been conflicted, the single shareholder may use limited liability to harm the creditor's benefit easily. All of these may be the great hidden danger of protecting the creditors' benefit. Therefore, as the specific limited liability company, one-man company should be managed strictly, especially for the abuse of its legal personality and the application of corporate personality denial.On Jan. 1st.2006, the new enacted Company Law admitted the legal personality denial institution of company explicitly. It means "to puncture the company veil" or "to open the company veil". Speaking specifically, this institution means the denial of the company and the shareholder's independent personality and the shareholder's limited liability in order to restrict the shareholder abuse his right and protect the creditors' benefit or social interests. Under this institution, the shareholders take responsibilities to the creditors and society directly. The denied of the company legal personality institution is a new lawful institution, which comes out with the special application of the corporate institution. To manage one-man company needs its assistance. However, while using the principle of "opening the company veil", we should realize that it is a double-edged sword. On the one hand, it prevents that the investors abuse the limited liability principle to gain the personal profit and to harm the creditors' and the social public interest. It may have certain deterrent function to the investors. On the other hand, if this principle is used extremely frequently, it may be so dangerous to the application of the limited liability principle and influence the investor's investment enthusiasm seriously.Company Law Clause 20 says: If the company shareholders abuse the stockholder's right to cause the losses of the company or other shareholders' profit, they must undertake the liability of compensation legally. If the shareholders of the company abuse the company's legal personality independent status and the shareholder's limited liability to escape the debt and the damage the creditors' benefit seriously, they must undertake the joint liability to the company's debt.Comparing to the judge's practice in the past, the official establishment of the denied of the company legal personality institution will restrict the phenomenon of the abusing the company personality and the shareholder's limited liability more effectively. But, the denied of the company legal personality institution is too summarized, and it doesn't have the particular regulation towards one-man company, so it is very difficult to restrict one-man company directly. This article mainly discusses the denied of the legal personality institution of one-man company. The key points of it are the particularity of the denied of the legal personality institution of one-man company and the denied of the corporate personality on one-man company substantively. I hope this article can propose some useful suggestions for the denied of the legal personality institution of one-man company in China.This article contains five parts.Part One: This part introduces one-man company briefly, including one-man company's production and classification. In the aspect of production, I introduce one-man company's confirmation case as well as the influence to legislation of various countries after it has been confirmed. In the aspect of classification, I analyze the one-man company and the similar one-man company emphatically. We should not neglect that there are a lot of similar one-man companies in reality, and this is also the key point of what I expound in the article.Part Two: This part introduces the law foundation of the denied of the legal personality institution of one-man company and further analyzes the necessity of this institution, including three principles, three situations of application as well as four factors of constitution.Part Three: This part introduces the particularity of one-man company and the denied of the personality's combination, including the particularity of one-man company applying the denied of corporate personality institution, the particularity of presenting evidence liability, as well as the particularity of several kinds of concrete one-man companies. Company Law proposes that if the shareholder of one-man company cannot present evidence, the company will face the danger of the corporate personality denial. This part wants to prove that this institution doesn't have the practice meaning, through analyzing the shareholder of one-man company how to present evidence.Part Four: This part introduces the corporate personality denial institution of similar one-man company. The new act has already admitted the one-man company in form. However, the act restricts one-man company strictly from every aspect, such as capital, audit, accountant and so on to protect the benefit of creditor. For this reason, it may cause many investors choose the form of similar one-man company, and the typical form of it is couple company. This part wants to expound the realistic importance of the denied of the legal personality institution of one-man company substantively, through the analysis of the couple company as well as some related cases.Part Five: Conclusion.