Control Of The Liability Of The Company

With the development of social economy and severe competition between companies,more and more of them are becoming united,which obviously shows the tendency of developing into corporate groups.As a result,the subject of relationship between controlling companies and subsidiary companies is much more concerned in the fields of academy and practice.Since controlling companies are able to impose influence or manipulation on subsidiary companies,they usually sacrifice subsidiaries for themselves or corporation groups to the utmost of profits.So it is of great significance to protect minority shareholders of subsidiaries.For this purpose,in view of actually wide existence of control-subsidiary relationships,this paper is firstly attempting to summarize and review the academic achievement and practical experiences of home and abroad,and then researching on the issue of controlling companies' legal liabilities in a special perspective,which is expected to be helpful to the improvement of China corporate law.The contents of this paper are composed of like this:Chapter One is the part of introduction.The author firstly points out the necessity and significance of putting research on the issue of controlling companies' liabilities,and demonstrates that the tendency of developing into corporate groups brought out the conflicts of benefit between controlling and subsidiary companies.In this way,the minority shareholders of subsidiaries should be provided special protection in law in order to keep balance.Secondly the author indicates the scope of research in this paper about controlling companies' liabilities.On the basis of introducing three key principles of dealing with affiliate companies in theory,it is pointed out here this paper will only focus on the liabilities to the minority shareholders of subsidiaries,excluding the liabilities to the creditors.Chapter Two is to conceptualize controlling company and subsidiary company.The author firstly introduces the conceptual evolution of criterion from traditional to revised ones about controlling companies.Secondly it concentrates on making distinction among relative concepts;so as to make it specialized in corporate law of our country.Chapter Three is on the theoretical foundation of controlling companies' liabilities.The author firstly points out that the liabilities are based on Fiduciary Duties owed to subsidiary company and its minority shareholders,which could be supported by many theories or principles in law.Then taking corporate directors' duties for reference,the contents of fiduciary duties of controlling companies can also include duty of loyalty and duty of care,the former of which,however,is considered to be the more important part.Thirdly,fiduciary duties of controlling companies are mainly used in the case that minority shareholders is possibly harmed.Chapter Four is on the regulating mode of controlling companies.By summarizing up legislation and case in different countries or areas,the author reveals that it can generally be classified into two categories.One is the mode of directly regulating affiliated companies,and the other is the mode of indirectly regulation referring to directors' duties.Chapter Five is on the present of China corporate law concerning about controlling companies' liabilities and how to take improvement for the future.Firstly the author analyzes and generalizes the reasons why controlling companies seriously abuse its power of control in China, especially in listed companies.Secondly the author summarizes the legislative regulations in corporate law at present,and further more discusses about how to improve it.Finally,from her point of view,the author comes up personal suggestions on adjusting and supplementing relative provisions in China corporate law.Chapter Six is the part of conclusion,which provides some important points necessary for further thinking.