Equitable Subordination To The Principles Of Research

In the modern economy society, abusing of limited liability leads to imbalance of interests, especially the appearance of controlling and subsidiary companies, exacerbated the condition and challenged the system of limited liability, many countries tried to reacted to this phenomenon. Doctrine of equitable subordination was established in this background, it based on the protection of rights and interests of the equity value, when controlling company or shareholder used a unfair means in the business, claim of theirs should be subordinated. Scholars of our country in this field have contained introducing this doctrine, but the existing investigation on equitable subordination is relatively weak and many focused on protection of creditors. In order to understand the doctrine of equitable subordination more profoundly, and introduce the doctrine to Chinese law better, the paper is divided to five chapters to analysis:Chapter One presents the definition of doctrine of equitable subordination and legal basis. This chapter analysis several theories about doctrine of the equitable subornation, trying to conduct a comprehensive definition to the doctrine; Then explained the legal basis of doctrine of equatable subordination, including doctrine of equity and justice, goof faith and prohibition of abuse of rights.Chapter Two describes origin and development of the equitable subordination. Doctrine of equitable subornation was established in America, and developed through judicial application. Canada have applied the doctrine through cases, and in Taiwan of China, the doctrine was introduced through the enactment in "Company Law". This chapter also produced a brief analysis about the current situation and future trends of the doctrine of equitable subordinationChapter Three compared the doctrine of equitable subordination and other doctrines on protection of creditors, including doctrines of "piecing the corporate veil", substantive consolidation and good faith of controlling shareholder. This chapter describes three doctrines in turn and with a comparative analysis with equitable subordination, in order to show the characteristics and advantages of the doctrine. Chapter Four is the focus of the paper. This chapter investigated application of equitable subordination in a comprehensive research. From the application condition, application limitations and applicable to several aspects, the research also combined the latest achievement of American judicial practice.Chapter Five provides the legislative proposals on introducing the doctrine of equitable subordination. Firstly, our traditional company law was still base on single company, unable to adapte to the judicial practice. Secondly, the introducing of doctrine "piercing the corporate veil" in our company law exists some shortcomings in protection of creditors, and the introducing of the doctrine of equitable subordination can be good for its amendment. Finally, the author proposes some legislative proposals on establishment of the doctrine of equitable subordination in our country.