Study On The Disregard Of One-man Corporate Personality Of China

The Corporation Law formally executed on January1,2006ordained two newinstitutions: one-man corporation and disregard of the corporate personality. Theprovisions of these two institutions are great breakthrough and progress of corporationlaw legislation, especially the admission of legal status of one-man corporation whichmeans our research on one-man corporation moves from theory to practice. However,due to the defects of independent corporate personality institution as well as thecharacteristics of one-man corporation, shareholder of one-man corporation is morelikely to abuse independent corporate personality and limited liability of shareholderand then damage the benefits of creditors or relevant interest groups. While therecognition of one-man corporation, a number of shortcomings will become apparent.Current Corporation Law of our country stipulates the institution of disregard of thecorporate personality and disregard of one-man corporate personality. Nevertheless,2abstract articles are insufficient to deal with challenge and controversy in judicialpractice. On the basis of drawing lessons from foreign research results and advancedexperience of disregard of one-man corporate personality, combining with ourspecific judicial practice, this paper is to develop and improve our institution ofdisregard of one-man corporate personality.This paper is divided into four parts.Part I is about basic theory of one-man corporation and disregard of thecorporate personality. Beginning with the analysis of concept and types of one-mancorporation, it discusses the fundamental features of one-man corporation. Then itanalyzes the value and limitation of independent corporate personality institution. Itslimitation manifests in the institution supplies inadequate protection for creditors butopportunity for shareholder to seek interest. This institution easily becomes aninstrument for the purpose of abuse and leads to unfair results. Finally it discusses thevalue of disregard of the corporate personality and puts forward that the theory ofdisregard of the corporate personality is a profitable supplement to independentcorporate personality.Part II is a comparative study of foreign disregard of one-man corporatepersonality. Through a comparison of Britain and America, it brings forward aviewpoint that the corporate personality should be treated and applied with apragmatic and open-minded attitude nowadays since independent corporate personality is moving from absolute to relative. Through a comparison of Germany,Switzerland and Japan, it proposes that while drawing lessons from common lawcountries, civil law countries should combine with national judicial practice andatmosphere, prudently applying the theory of disregard of the corporate personality.Part III is an overview of current situations of disregard of one-man corporatepersonality in China. It analyzes domestic terms of disregard of one-man corporatepersonality such as the elements of subject, behavior, result and subjective fault. Thenconcentrating on our current laws and regulations as well as judicial practice, it findsout existing problems of our disregard of one-man corporate personality. For example,it is difficult to apply the theory in judicial practice due to current abstract regulations;it is difficult to handle economic issues of this field owing to narrow scope ofapplication of disregard of the corporate personality.In the light of existing problems of our disregard of one-man corporatepersonality, Part IV holds a discussion in the following aspects, including judicialinterpretations of the Supreme People’s Court and disregard of one-man corporatepersonality reversely. First of all, this paper recommends defining the circumstancesand burden of proof of disregard of one-man corporate personality by the way ofjudicial interpretations so as to deal with problems which are caused by abstractregulations. Next, this article talks over a special phenomenon of one-man corporationinstitution—disregard of one-man corporate personality reversely, including internaldisregard reversely, external disregard reversely and their respective feasibilityanalysis, and brings forward the author’s suggestions finally.