The Legal Research On Directors Of Parent Corporation’s Responsibility To Its Subsidiary’s Creditor

The emergency of parent-subsidiary corporation is the product of era development. In the world, especially in the developed companies, the parent-subsidiary company has become the widespread economic phenomenon. Parent-subsidiary has become the dominant force in the national economy and international competition in the world, playing the extremely important role in the international arena. According to the survey collected by USA, the sales sum of the world’s largest200companies is larger than America’s gross domestic product (GDP), equivalent to28%of the total gross domestic product around the world. The world five largest car manufacturing group, GM, Ford, Daimler, Mercedes-benz, Toyota occupied60%of the total amount of world car sales. More than half of the total amount of electronic product sales around the world belongs to the five largest electronic enterprise groups. Those large enterprise groups progressed through technical innovation and the development of the science and technology. The company has become the birthplace of industrial technology in the world through a huge amount of money and manpower.This paper mainly studies the legal research on directors of parent corporation responsibility to its subsidiary’s creditor. As the parent company, the controlling shareholder of the subsidiary, the control of the company has its legitimacy on the necessity of existence. Because of the huge economic benefits, the parent company on the basis of its strong position control, under the protection of shareholders’ limited liability, abuse the control of corporate. Through the unfair related transactions, parent company ignored the subsidiary independent personality, against the interests of the subsidiary and its creditors. Under this circumstance, it is insufficient to protect the creditor in our company law. Through studying the foreign relevant adjustment of parent-subsidiary and analyzing the special provision of the legal system and company’s creditors, this paper put forward some advises on the basis of the actual situation.This article adopts the method of comparative study, standard of qualitative analysis method to study the problem, in order to promote the development of the related theory and practice of the company law of our country.The first part:introduction, that is, the problem is put forward. From bankruptcy case about Monkey King group in2001, when the listed company’s bankruptcy does not pursue the responsibility of the big shareholders and actual controllers, and strength is not enough to protect the creditor, and involves the interests of the public shareholders, thus greatly influenced by the case at the time. This part introduces the background of writing, the research content and significance, review of domestic and foreign related research, methodology of thesis writing, the innovation of the paper and writing difficulties, outlining the writing thoughts and structure of the article.The second part:for the body part of the whole paper. This part is divided into five chapters.Chapter1:the Overview of Parent-subsidiary Corporation. This chapter is divided into three sections. The first part is describing the legal relationship between the parent and subsidiary, from the prospective of legal part, including parent-subsidiary legal definition, the characteristics of the legal relationship of parent-subsidiary, such basic problems as the cognizance of the parent-subsidiary the second part expounds the obligation and responsibilities of the company directors, mainly from the diligent obligations and duty of loyalty, director liability mainly from the directors of the company shall bear civil liability nature and contents of the two ways are introduced. The third part is on the basis of the first two parts, presenting some fundamental problems on the parent company directors’responsibility.Chapter2:the Jurisprudential Basis of Directors of Parent Corporation’s Responsibility to its Subsidiary’s Creditor. Four parts are involved in this part. First, subsidiary creditors to the parent company directors responsibility is the breakthrough of subsidiary company legal person independent liability and limited liability company. Second, the undertaking of the responsibility of the parent company director to subsidiary’s creditors is the embodiment of the theory of corporate social responsibility. Third, the undertaking of the responsibility of the parent company director to subsidiary’s creditors is the embodiment of the parent company faith obligations. Fourth, the undertaking of the responsibility of the parent company director to subsidiary’s creditors is also the need of the modern concept of social fairness and justice, in line with the trend of historical development, is conducive to protect the company’s creditors legitimate rights. From the four parts to discuss the parent company directors liable to the company creditors has a strong legal basis.Chapter3:the Element of the Responsibility of the Parent Company Director to Subsidiary’s Creditors. Combined with the domestic and foreign related case, this part describe the components of the creditors subsidiary to the parent company directors responsibility in detail, from the parent company director violates the fiduciary duty (fault), the control of parent company implemented the improper behavior, control of its parent company’s improper behavior, the damage to the unit and the causal four aspects to introduce.Chapter4:Study of Abroad on the Parent Company Directors Responsibility. Through the analyzing on piercing the corporate veil, the principle of deep rock, the merging principle, of Anglo-American law system, and on the civil law of German, French and Japan, the contrast study on the Anglo-American law system and continental law system are used. Then, the paper tries to find the responsibility of the parent company director to subsidiary’s creditors.Chapter5:the System Building of the Parent Company Director Responsibility. First, the overall thought of the system construction, such as questions about the legislative mode legislation style. The legislation content can be described from two aspects, entity and procedure is introduced. The entity part, such as the definition of parent-subsidiary, consummates our country company law personality denial system, curing liability form problem; The main aspects of procedure part include clear prerequisites, namely used relief unit itself, direct action or to act on his behalf in litigation, the burden of proof of the problem, and so on. This part is the emphasis of this paper, which is the difficult point of the whole paper.The third part:Conclusion.