The Application Of The System Of Disregard Of Corporate Personality In Companies With Registered Capital Of One Dollar

The implementation of the new Company Law of the People’s Republic of China in March 2014 eliminated the minimum capital requirement when registering a company. Such reform will lead to a new height of investments; One Dollar Companies(thereafter referred to as "Dollar Companies") will sprout into the market, bringing along more and greater business risks. Due to the People’s Republic of China’s absence of a sound credit system and the lack of a mature legal system towards the implementation of the new Company Law, the hot-button issue becomes how the creditors of Dollar Companies could be well protected. This article discusses how certain principles and application of the disregard of corporate personality becomes appropriate towards protecting the creditors of Dollar Companies in trial.Try to build a system which can help to deal with such type of cases,and analyse how the doctrine were applied in former and ongoing trials,.so judges could deny corporate personality and hold shareholders of Dollar Companies jointly and severally liable, thereby rendering it more costly for those seeking profits illegally and preventing investors of undercapitalized companies from violating the interests of their creditors.This article consists of five main sections. Firstly, this article introduces the social background from which Dollar Companies emerge and the potential risks.Secondly,discuss the system of disregard of corporate personality,including its definition and practical in trial and its defect.Thirdly,analyse the application of the system of disregard of corporate personality in companies with rgistered capital of one dollar. Next the article outlines the relevant elements in applying the doctrines of disregard of corporate personality in court filing procedures.Finally the articles focuses on how to improve the appropriate princip es and application of disregard of corporate personality in judicial practices involving Dollar Companies and try to build a system which can help to deal with such type of cases,meanwhile,discusses former and ongoing trails where denial of corporate personality were applied.