The Application Of Reverse Piercing In The Affiliated Companies

The mainstream view is that the law of corporation in China is only applicable to shareholders abusing independent company personality,but in 2013,the supreme people's court released the 15th guidance which sentenced affiliates companies to bear the joint liability,referring to the paragraph 3 of article 20,expanding the article to the situation of confusion of personality.In fact,shareholders' abuse behavior and personality confusion are two different concepts,which belong to two different types of veil piercing in the two law system,while China's law only stipulates shareholders' abuse of rights.If there is no investment relationship or control relationship between the several affiliated companies,there is no behavior of abusing the independent personality of the company,which does not conform to the subject requirements and behavior requirements of the veil piercing in China.Therefore,the article 20 cannot be applied.How to find the legal basis for veil piercing of affiliated companies under the premise of respecting the current system of law in China is the focus of this paper.This paper believes that the reverse piercing corporate veil rule should be applied and combined with the existing veil piercing rule to form a triangular piercing to jointly pierce the veil of the affiliated companies.It does not mean that a new rule should be formulated.The purposeful expansion of article 20,paragraph 1 of the company law can provide the hermeneutic basis for the reverse piercing rule.