Study On The Application Of "Piercing The One-person Limited Liability Corporate Veil"

Since 2005,the one-person limited liability company has been formally confirmed in the “Company Law”,there have been many cases of infringement of the legitimate interests of creditors,due to the particularity of personnel composition,governance structure and supervision mechanism of the one-company.As a regulation of the ex post facto measures,Piercing the one-man corporate veil has been widely concerned by academics.After years of development,the system is also widely used in practice,but at the same time there have been many problems.The rules of “piercing the one-man corporate veil include Article 20 and Article 63.How to apply these two provisions in judicial practice is an unavoidable problem.In practice,there are some serious differences in the same case,and because some of the legal provisions of the litigation subject made an inappropriate restrictions,resulting in the judge in accordance with the principle of fairness faced with unreasonable embarrassment.The system of “Piercing the Corporate Veil” not only denied the company's independtent status,but also denied the independtent status of the shareholders who misuse the limited liability.In fact,the law treats the company and the shareholder as one.The “Company Law” provides that one person's company to the form of the number of shareholders as the standard.Therefore,whether a real one company can apply one person's corporate personality denial system becomes a practice in the inevitable controversy.In the judicial practice to couples companies are more common.The court in the judgment should be in the protection of fair and just under the premise,taking into account the interests of multiple shareholders and the meaning of whether the unity of the shareholders of the capital is a single and many other elements.One person company in the application of corporate personality denial system,there are the following specialities:a.Compared with the shareholders of multiple shareholders,one person applies a higher proportion of personality denial system;b.In the case of a creditor claiming that a company is confused with its sole shareholder property,the burden of proof of property shall be borne by the shareholders of one company;c.In the case of a person's companyto apply for a personality denial system,the company may also be responsible for the case of individual shareholders.The rules of denial of the person's personality specified in our law are Article20(3)of the Company Law and Article 63 of the Company Law.As Article 20(3)is in the General Law section of the Companies Act,the following conclusions can be drawn:A.Article 20 may apply to all companies with laws and regulations,including limited liability companes,joint stock limited companies,and legal joint ventures,Chinese-Foreign contractual joint ventures,Foreign-invested enterprises and so on.B.The applicable elements of the provision include:a.Behavioral elements: the existence of abuse of shareholders;b.Subjective elements: The purpose of shareholder misuse is to evade debt;c.Elements: The abuse of shareholders seriously damages the interests of corporate creditors;At the same time,the article also implies a causal relationship between the damage to the interests of corporate creditors and the above-mentioned misuse of shareholders.In the relation to the legal relationship between Article 20(3)and Article 63,I believe that the Article 20 has a lasting effect to the sub-part.Piercing the one-man corporate veil may apply not only Article 63,but also Article 20.Where the creditor claims to have a company merging with the shareholder's property,it shall first apply Article 63 of the Company Law.Different from the ordinary company,one person in the application of personality denial system mainly in the following circumstances: Company capital is significantly insufficient,one person corporate personality skeleton,one company to use legal personality to escape the obligation.In the context of the revision of the Company Law2013,this paper presents the following main recommendations on the denial of one's corporate personality in the case of significant capital deficiencies:(1)The determination of significant capital is no langer only the minimum registered capital limit as the srandard;(2)To determine whether the capital is “significant shortage”should be based on the nature of the company and the scope of business risk and investment funds are consistent with the standard and so on.One person corporate personality skeleton,including the meaning of shareholders and companies that mixed,mixed with the property,business mix,where the property is the core of the same personality skeleton.According to the provisions of Article 20(3)of the Company Law,the general application of the one-person corporate personality denial system includes the mainelements,the behavioral elements,the results and the subjective elements.In terms of the main elements,the controversy in practice is that the husband and wife companies,different courts for couples whether the company has a different interpretation of the company: Some courts believe that in accordance with the provisions of the Company Law,the husband and wife companies because of the majority of the shareholders of the company,some courts under the "Company Registration and Management of a number of issues," the provisions of Article 23,will not be submitted to the property division certificate of the husband and wife that substantial One company.This paper argues that the standard of a person's company also needs to be clarified by the Supreme Court in the form of judicial interpretation or guidance.In determining whether a husband or wife company is a one-person company,it should consider whether the husband and wife jointly funded,whether the husband and wife agree.In the affiliated company as a one-man company to deny the defendant's personality,reverse the company veil and other aspects of the practice of controversial issues,This paper argues that the Supreme Court published the guidance case has appeared in the majority of the shareholders of the company to apply for legal personality system,In practice,when the shareholder uses the affiliated company to harm the interests of the one-man company creditor,the judge may refer to the case of the guidance case,and the reference to "the nature of the act and the result of the harm is equivalent to the case stipulated in “ Article 20,paragraph 3 of the Company Law ".The specificity of the rule of denial of legal person personality includes the special circumstances of the application,the special burden of proof and so on.Through the analysis of the reasons for the court to judge the mixed property of one company and the property of the shareholders,this paper argues that the court of the one-man shareholders of the burden of proof of the requirements should not be too harsh.As long as the shareholder can prove that it is separated from the company's bank account,and the bank account details,to pay the details of the financial documents and other financial expenses to prove that the company's expenses and the normal operation of the company,and the company's funds are not available to the defendant's shareholders,do not have the company has a very sound and standardized financial system and special audit report as a judge between the company and the shareholders do not exist between the property of the rigid conditions.In the case of the burden of proof,Article 63 of the Company Law onlystipulates that the burden of proof of the elements of the merger between the shareholders of the company and the company existes,sand the plaintiff still needs to bear the burden of proof on the main elements and the results.And concluded that:in practice,the court will not be a different type of shareholder of the company to make a different classification of the referee,and through data analysis pointed out that the application of piercing the one-man corporate veil that the main problem of abuse is the lack of supporting measures,cerditors too dependent this system protects its own legitimate rights and interests.In the part of the conclusion,I summarizes and reviews the full text,and puts forward some suggestions and suggestions on the problems in the judicial practice:Establish a rigorous trial guiding principle,Give full paly to the role of judicial interpretation and the Supreme Court to guide the case,The judiciary judges should strictly grasp the application requirements,establish and improve corporate credit information pbulicity system.