The Civil Liability Of Actual Controller's Abusing The Corporate Personality

The company controlled by the actual controller is a kind of state that is different from the traditional control mode in the field of the company.In this situation,the company is controlled by other people,such as the board of directors and others.This kind of state control provides a market transaction and enterprise organization's new economic activities for entrepreneurs;on the other hand,it provides convenience for the actual controller for the use of related party transactions,security breaches and other ways of tunneling the controlled company,resulting in the company system alienation.At present,the case involving the actual controller has occurred,due to the relevant legal provisions are not clear,this kind of case handling is very complex.This paper takes Shanghai M lending disputes(Group)Corporation v.Shanghai A Electric Tool Co.Ltd.case as a typical case.By the summary and anatomy on the controversial points of the case,this paper is to clarify the theoretical and practical aspects of the doubt in this issue,and then put forward my opinion.This paper is divided into three parts as follows.First of all,the introduction analyses the basic case.Then it sums up and summarizes the main focus of the dispute.It involves the following elements: how to define the actual controller;whether the actual controller should bear legal liability;how to investigate the legal responsibility of the actual controller.In the first part,the author gives the comparative analysis of the two main criteria for the actual controller,and gives the conclusion that the “fact control” is the criterion of affirming “dominate-subordinate” relationship between the actual controller and the controlled company.By deconstructing the behavior of actual controller abusing the control power,this part analyses the actual controller is how to infringe upon the interests of creditors step by step.In the second part,first of all,the author analyses whether the actual controller should bear legal liability to the creditors of the company,and then comes to the conclusion that the actual controller should bear the legal liability to the creditors of the company.Then,from the perspective of the theory of company law and the level of extraterritorial law,the author tries to find out the theoretical basis of the actual controller's liability to the creditors in the company law.From the perspective of theory of company law,to investigate the legal liability of the actual controller is not only the pursuit of substantive justice in corporate governance,but also the reflection of the principle of honesty and credibility and the necessity of the balance of rights and obligations of the actual controller.From the perspective of the use for reference of extraterritorial law,it is the requirement of complying with the international development trend of the legal system to confirm and investigate the legal liability of the actual controller.This paper lists regulations on the actual controller of different countries like the UK,Australia,Germany and South Korea.It provides the theory support and basis for the establishment of feasible and operable regulations of the actual controller on legal liability in our country.Finally,the author expounds the necessity of investigating the actual controller's liability to the creditors in the company law.The actual controller as a form of controlling company provides the third kind of economic activity which is outside market transactions and enterprise organization for entrepreneurs.It is the new measure for shareholders to deal with the system of disregard of corporate personality.It reflects the game between entrepreneurs and legislators.Since the company law has created a case in the principle of independent personality of the company to investigate the shareholders' liability on the abuse of corporate personality,and the behavior of actual controllers obtaining illegal interests from the company is more severe than shareholders',it is necessary for the company law to directly investigate the liability of the actual controller to the creditors of the company.The third part is to solve the problem that how to investigate the legal responsibility of the actual controller.Based on the analysis of the existing legal provisions and the three different ways of relief for creditors,this paper gives the conclusion that we can investigate the legal liability of the actual controller through the system of disregard of corporate personality.On this basis,it analyses the significance of regulating the actual controller into the disregard of corporate personality and some additional notes.Its significance is to curb the actual controller to circumvent the law.It is helpful for creditors to get effective relief.However,the system of disregard of corporate personality is a double-edged sword,we should be cautious in judicial practice.In addition to emphasizing the fact that the actual controller must have the behavior of abusing control power and it challenges greatly the company's independent personality,it is also necessary to determine the control relationship between the actual and the company.The creditors must have the proof that the actual controller has obtained improper benefits from the company through control power.Finally,we should pay attention to the dishonest behavior of the actual controller.As long as the actual controller has the behavior of circumvention of the law,it can be found that it is not good faith and he will bear adverse consequences in the lawsuit of disregard of corporate personality.