Research On The Application Of "Reverse Piercing Of The Corporate Veil" In Sister Companies With Confused Personality

When the country revised the “Company Law” in 2005,it established the system of“Pierced the Company's Veil”(for the sake of distinction,“Piercing the Corporate Veil” in Article 20 of Corporation Law is called the “Traditional piercing the Corporate Veil” here.)for the first time.But with the development of the economy,the behavior of abuse is more diverse.For example,in the market,there are a large number of situations in which the joint controlling shareholder or the actual controller use the relationship between sister companies to confuse the corporate personality to achieve the purpose of avoiding debt.The system of“Traditional Piercing the Corporate Veil” is unable to figure out these problems,and the legal basis and standards of courts for such cases are still very different.However,the system of“Reverse Piercing of the Corporate Veil” can well solve these problems.The key advantage of using “Reverse Piercing of the Corporate Veil” is that the flow of responsibility is reversed,that is,the company takes on the joint liability of the shareholder's debt.In essence,the application of “Reverse Piercing of the Corporate Veil” in sister companies is to combine that system with the system of “Traditional Piercing the Corporate Veil”.To be specific,the first step in this process was to puncture the veil between the company with the debt liability and the shareholders,and the shareholders takes responsibility of the debt of the company,Which is the Traditional Piercing the Corporate Veil.The second step involved in the Reverse Piercing of the Corporate Veil,which is to puncture the veil between the relevant sister company and the shareholder,and the other sister companies takes on the joint liability of the debt of the shareholders.Based on the theory of Reverse Piercing of the Corporate Veil proposed by the theoretical realm,this thesis combines the problems in the trial of such cases in China's judicial practice,and constructs the rules for dealing with the external responsibility of sister companies with confused personality.This paper is divided into four parts:The first part of the thesis is the statistics and analysis of the status quo of judicial judgments in the case of the external responsibility of sister companies with confused personality.This part collects and screens 76 relevant sample cases and the classifies and analyzes the sample cases according to different standards,illustrating the trial of such cases in judicial practice.The second part of the thesis analyzes the “necessity” of introducing the system of Outsider Reverse piercing the corporate veil.Firstly,it explicates the system of Outsider Reverse piercing the corporate veil,and then discusses the legitimacy of applying the system to hear such cases.Then it discusses the irrationality of applying the existing legal provision and the shortcomings of other solutions to explain the irreplaceability of the system.The third part of thesis summarizes the problems in the trial of the cases of external responsibility of sister companies with confused personality in the current judicial practice.Due to the imperfect system of Piercing the Corporate Veil,the judges have many problems in the trial of similar cases in judicial practice.It mainly causes three problems,the constitutive requirement is not clear,the right and interests of the relevant subjects are harmed,and the distribution of the burden of proof is too concentrated.The last part of the thesis discusses the construction path about dealing with the cases of external responsibility of sister companies with confused personality.In light of the problems existing in the judgment,the writer will give some advice.For the constitutive requirements of the system,it learns from Traditional Piercing the Corporate Veil,that is,subject,behavior and consequence.About the balance of the right and interests of the relevant subjects,it discusses the interest protection methods for the innocent shareholders and the creditors of the sister company.As for the issue of the distribution of the burden of proof,it proposes a“phased” approach.