On Judicial Determination Of Personality Confusion Of Affiliated Companies

Based on the needs of commercial activities,many companies have created many affiliated companies through new establishments or holdings.While expanding the scale and obtaining more benefits,there are also arbitrarily transferred assets between affiliated companies,evading debts,and infringing the rights of creditors problem.In the case of "a fire company v.A Sichuan real estate company construction project construction contract dispute",the parties to the case on whether the "fire engineering construction contract" should be cancelled,whether a Sichuan real estate company,Mianyang industrial company constitute the personality of an associated company Confusion creates disputes.During the trial,the court extended the applicable standards of the traditional corporate personality denial system,arguing that the loan relationship between a real estate company in Sichuan and an industrial company in Mianyang meets the criteria for financial confusion,thereby determining that the two constitute an affiliate personality confusion.However,the traditional corporate personality denial system is aimed at the situation where the company and the shareholders are mixed,and the constitutional elements,violation of legal principles,and the resulting consequences are different from the situation of the mixed personality of the affiliated company.A real estate company in Sichuan and an industrial company in Mianyang do not constitute confusion in personality among affiliated companies.This case seems to be dealing with whether the contract signed by the two parties to the dispute should be terminated.In essence,it is to determine the specific criteria for the confusion of personality of the affiliates.In the absence of clear provisions in China's current laws,when judging the issue of personality confusion among affiliated companies,the judicial authorities mostly refer to Guiding Case No.15 issued by the Supreme People's Court to apply Article 20,paragraph 3,of the Company Law of the People's Republic of China.However,the situation of personality affiliation of affiliated companies is complex.Judicial authorities cannot blindly expand the applicable standards of the traditional company personality denial system when dealing with such issues,and apply the traditional shareholders' and company personality identification standards to affiliated companies.Personality confusion.It is necessary to improve the standards for identifying personality affiliation of affiliated companies and related judicial systems,uphold the basic spirit of "use with caution",improve judicial interpretation and processing rules,strictly determine the standards for confusing personality affiliates,and achieve fairness and justice in the law.