Analysis On The Piercing Corporate Veil System Of Affiliated Companies

Sough the Chinese Corporation Law stipulated the piercing corporate veil system,but there are many problems during the judicial practice,especially when it happened on the affiliated companies.In judicial practice,we can find that the judges umpiring the piercing corporate veil cases of affiliated companies use the different regulations and inference.This occurred because Chinese Corporation Law regulated the piercing corporate veil system and affiliated companies indefinitely.Therefore,this paper hopes to provide a better solution to help the piercing corporate veil system apply to the affiliated companies.The first part of the article introduces that why the phenomenon of confusion of personality happened on the affiliated companies,and there is lack of effective regulations to abuse this phenomenon.Through analysis the guiding case No.15 enacted by the Supreme Court,we can find that the judge's reasons judged by the first-instance court and appellate court are different,because of the incomplete regulation of the piercing corporate veil system of affiliated companies.The second part of the article introduces the affiliated companies' concept,forms and the reasons that it occurs,and also states the piercing corporate veil system's evolutionary process and specific application.In the end,this paper put forward that it is necessary to set up the piercing corporate veil system of affiliated companies in the context of the complication of control relationship,shareholder's legal personality and risk socialization.The third part of the article introduces the identification rules and application of the piercing corporate veil system of affiliated companies.Firstly,this paper analysis the specific application of the piercing corporate veil system of affiliated companies from its main elements,behavioral elements and result elements.Secondly,this paper fined the differences arising from the application of article 20 of the company law between the affiliated companies and the single company.Finally,this paper discusses the application of the piercing corporate veil theory of affiliated companies in tax law,competition law and environmental law.The fourth part of the article discusses the improvement measures of the piercing corporate veil system of affiliated companies,include elaborates its item ruled design,division of law branch and improvement measures.And in order to protect creditors' rights better,this paper think that it is necessary to coordinate the relationship between the system and the compulsory execution system,the system of revocation and the basic principles of civil law.