Research On The Reverse Piercing The Corporate Veil

Modern corporate system, on the one hand, advance the economic development，onthe other hand, it takes many problems. The controlling shareholders of company takeadvantage of the corporate personality and limited liability to conduct illegally to getprofit and interest for themselves that will damage the legal interest of the creditors andother shareholders of companies. Under this circumstance, in order to provide remedy forthe victims and maintain the real justice, court will pierce the corporate veil of companyand order the shareholders who hide behind the company to shoulder the debt. However,as the development of the corporation system, new and complicated problems emerge.Diverse corporate models enable shareholders to control, escape personal debt and legalobligations and duties more conveniently. In addition, under some situations, companiesand shareholders will pursuit to pierce the corporate veil actively. To maintain justice,reverse piercing corporate veil was invented. After the latest company law permitsone-man company, the possibility of mixture and overlapping of shareholders andcompanies’ personality and property increased. So the risk of shareholders using companyas a tool to conceal their revenues and asset appears. This will damage the interest ofcreditors of shareholders. Since the loopholes of our company law, court can not findenough reason to make decisions. They have to explain the law by themselves. So we needto repair the loopholes and enact some judicial explanations to extend the extent ofpiercing corporate veil to resolve those difficult cases. This thesis will explore thedevelopment of this new system, inner jurisprudence and logical structure. Then it willportrait, explore and compare the reverse piercing cases of different countries. Finally, thisthesis will analyze the feasibility and necessity of it in China to help improve our companylaw.