Study On The Rules Of Substantive Consolidation Of Affiliated Enterprises In Bankruptcy In China

In the face of increasingly fierce market competition,in order to resist the risk,improve the efficiency and reduce costs,more and more economic entities became related enterprises through corporate division,and corporate combination,etc.However,this had caused much different kinds of abuse of association.Once the improper act of the affiliated enterprises influenced or occurred during the bankruptcy procedure,and damaged the creditor's legitimate rights and interests,the legal problems concerning the bankruptcy of the associated enterprise have resulted.In China,although the disregarding of corporate personality,bankruptcy's revocation and cancellation and other systems had been created in Company Law and Enterprise Bankruptcy Law,because of the complexity of affiliated enterprises,the concealment of misconduct,the abovementioned system could not solve some special problems in the affiliated enterprise bankruptcy successfully.Therefore,it is necessary to bring in the substantive consolidation rules to prevent the abuse of related relations and to realize the fairness and efficiency of the Bankruptcy Law effectively.There are four parts in this article: a.Summary of related enterprise bankruptcy.This section expounds the concept and basic characteristics of affiliated enterprises,and generalizes the patterns of abuse of related relationships,and the adverse effects on bankruptcy procedures.b.Basic analysis of the substantive consolidation principle.In this part,the author analyzes the theoretical basis of the principle of substantive consolidation,combing the substantive consolidation rule in its birthplace and the main practice place,developing history in the United States,concludes the judicial application of substantive consolidation standards in the United States,to provide reference for our legislation and judicial.c.Analysis of the necessity of establishing the principle of substantial consolidation.This part first reviewed the existing legal system deficiencies in solving the problems of affiliated enterprise bankruptcy in China,the necessity to bring in substantive consolidation rules on the basis of the above.At the same time,according to the substantive consolidation analysis in the judicial practice of China,examines the feasibility of bringing in the substantive consolidation,and to establish substantive consolidation summary the judicial practice of the successful experience and existed problems.d.Construction of the legal rules of the substantive consolidation of bankruptcy in China,which is also the key section of this article.In this part,on the basis of the theory of evaluation on substantive consolidation rule research,and the absorption of the successful experience of the judicial practice,the basic framework of the substantive consolidation rules had been built preliminarily both in substantive and procedure.In terms of the substantive,the main point is to study the standards of substantive consolidation,and established a standard system with serious confusion of the legal personality and fraud at the core;In terms of procedure,some opinions and suggestions are put forward for the main problems of substantive consolidation of bankruptcy procedure,including six aspects: the affiliated enterprise scope,alternative of the applicant,the allocation of the burden of proof,the settlement of jurisdictional disputes,establishment of balance mechanism and legal effect of the substantive consolidation.