The Research On The Applicable Standard Of The Theory Of Outsider Reverse Piercing The Corporate Veil

The development of the theory of outsider reverse piercing the corporate veil was based on the US who had experienced almost 100 years in developing this theory.After accumulating many cases,it had been accepted by majority of states.In the recent years,with the rapid development of market economy,the corporation,as one of the most important forms of economic organization,is becoming more and more essential.The Corporation Law amended in 2014 had eliminated the article of the minimum amount of money for setting up a corporation,which help the development of corporation system remarkably.For example,tons of small corporations and subsidiary corporations were built.At the same time,the corporation system exposed some serious problems that some shareholders abused the independence of the corporate personality system to evade the legal obligation or the agreed obligation,and the corporation system encouraged the abuse indirectly in some extent.The different opinions in whether to apply the outsider reverse piercing the corporate veil to deal with shareholder's abuse in both theoretical and practical area lead to different judgments in the same kind of cases.Some judges and scholars think that we cannot apply the theory of outsider reverse piercing the corporate veil in those cases,but there are no other methods to relief the shareholder's creditors' right and there are no other systems to prohibit shareholders from abusing.Therefore,the theory of outsider reverse piercing the corporate veil needs to be introduced in China Corporation Law to make up the deficiency of the company system.I analyze the nature of this theory,summary the applicable conditions and standard,coupled with the research of applicable standard in China,hoping to provide the specific legal basis in my essay.The first chapter mainly introduces the theoretical knowledge of the theory of outsider reverse piercing the corporate veil.It begins with basic knowledge of the theory of traditional piercing the corporate veil,presents the concept and classification of the reverse piercing the corporate veil on the basis of traditional piercing the corporate veil and tells the differences and similarities between the two theories.The second chapter discusses the legal basis and necessity of the theory of outsider reverse piercing the corporate veil.Firstly,I analyze the legal basis from the corporate independent personality and shareholder limited liability points of view.From the theoretical point of view,I analyze how the application of outsider reverse piercing the corporate veil can prevent the shareholder's creditor from suffering from the interest loss by the shareholder's performance that shareholder abuses the corporate independent personality.From the institutional point of view,the application of outsider reverse piercing corporate veil protects the fairness and justice of the corporate system.Secondly,the theoretical value,the practical need and the defect of the current system demonstrate the necessity of the outsider reverse piercing the corporate veil.The third chapter is about the development process of outsider reverse piercing the corporate veil in US,it experiences a process from establishing the “reverse control” standard to abandoning this standard,and then summarizes the applicable standard of outsider reverse piercing the corporate veil in American court through judging whether the corporation form exists.The fourth chapter discusses the applicable standard in our Chinese court by referencing the American standard.Firstly,I summarize the current situation of legislation.Secondly,because outsider reverse piercing the corporate veil has a more profound effect on the interest relevant parties,therefore I discuss the constitutive requirement by balancing the interest conflict between the shareholder's creditors and non-fault shareholders and corporate's shareholders.The last chapter is about the applicable cases of outsider reverse piercing the corporate veil happened in Chinese court which discusses how to help the shareholders' creditors with their creditors' right when corporate independent personality is abused in parent-subsidiary corporation,one-member corporation and sister corporation.