Legislatve Research Of Affiliated Enterprise's Illegal Bankrutacy

An affiliated enterprise arises in the intense market competition, whose unique organization plays an active part in improving the operation efficiency, reducing the operating costs and achieving the scale benefit and so on. However, it is the unique organization that easily leads the control enterprise and actual controller to manipulate the subordinate enterprise excessively, and induces unfair of related transactions between them, which provides the natural barriers, not easily discovered by external creditors, for the transfer of inappropriate property, conveyance of capital, and confusion of assets and account. When the bankruptcy of any one or several members of the affiliated enterprise occured, there are no properties offered by the insolvent debtor or debtors for the distribution among creditors, or the recovery of the creditors of the enterprise or enterprises in bankruptcy is obviously unfair. Because the relative terms and provisions about bankruptcy of the enterprise in corporation law, insolvency law, general civil law and criminal law are mainly applied in the bankruptcy of single enterprise, which is hardly used in the case of illegal bankruptcy of affiliated enterprise, it is necessary to institute our own complete system dealing with the illeagal insolvency of affiliated enterprise, based on the reference to such advanced systems in other legal regines on the regulation of the illegal insolvency of affiliated enterprise, as the rules of equitable subordination and substantive consolidation, liability of compensation or payment of manipulating corporation, and the obligations of joint payment of benefitial subordinate enterprise. There are main four parts discussed in the paper:apart from the preface and epilogue.The first part, the analysis of exsisting forms in illegal bankruptcy of affiliated enterprise, mainly followed:fix the definition of associated enterprise, search the internal relationship and external characteristics of affiliated enterprise, introduce the macro forms of affiliated enterprise's illegal bankruptcy in the form of examples, summorize the microscopic operations of associated enterprise's illegal bankruptcy. We acknowledge that the illegal bankruptcy of associated enterprise is expressly different with the normal corporation's insolvency, and it's unique and close organization creat the opportunity for illegal bankruptcy of associated enterprise.The second part, legal reality and evaluation about illegal bankruptcy of associated enterprise, which emphasizes the regulation for bankruptcy from corporation law, insolvency law, general civil law and criminal law, and points out the defects that exsist in the settlement of illegal bankruptcy of associated enterprise by the foregoing.The third part, legislative proposals about perfecting the regulations of associated enterprise's illegal bankruptcy, which put forward suggestions on legislation, through comparing and analysizing the relevant systems of associated enterprise's illegal bankruptcy in other legal regines, in according with our specifical economical conditions, mainly including the introduction of the rules of equitable subordination and substantive consolidation, the modification of existing rule of piercing the corporate veil,and the establishment of the obligation and liability of compensation or payment from control enterprise and benefitial subordinate enterprise.