On The Application Of Disregard Of Corporate Personality Among Affiliated Companies

With the rapid development of market economy,different types of enterprises appear.On the one hand,the increasing number of parent-subsidiary companies and affiliated companies has brought rapid economic development,but there are also many adverse phenomena that mutual transfer of property to evade responsibility among the parent-subsidiary companies or affiliated companies infringes the legitimate interests of third parties.On the other hand,although the Chinese company law has introduced the system of disregard of corporate personality since it was revised in 2005,there are no clear legal provisions on the issue of confusion of personality among affiliated companies,which infringes the interests of creditors.The No.15 Guiding Case issued by the Supreme People's Court in 2013 provides the basis for reference application to a certain extent,but there are still different opinions on the rationality of the application of the Adjudication Rules in this case.This paper attempts to study and discuss the application of personality denial system in affiliated companies by means of law interpretation,case analysis and comparative law among Chinese and foreign countries'.The whole thesis is divided into three chapters.Chapter one is about the problem statement.Firstly,it introduces the typical judicial case of personality denial of affiliated enterprises in China,that is,the Supreme Court Guiding Case No.15.The first section of this chapter mainly introduces the case facts of guiding case No.15 and the judgments of the previous trials,summarizing controversial focus of the case by analyzing the judgment ideasand reasons of the judges,that is,whether the personalities of three affiliated companies are confused or not,and whether the controlling shareholders such as Wang Yongli and other natural persons need to bear joint liabilities.The second section reveals the controversial focus of the case concluded by researchers from the academic and practical areas including issues in the application of judgment in Guiding Case No.15,such as the choice of the basis of judgment,the rationality of the applied method of the judgment rule and the responsibility of controlling shareholders to bear the joint liabilities.In the Chapter two,firstly,the author points out the breakthrough of the rule of disregard of corporate personality in China in guiding case No.15 from three aspects:the normative object,type and effect of the judgment result,based on the understanding of the existing provisions of Article 20 of the Company Law of China,.Secondly,from the perspective of jurisprudence methodology,it is amid to demonstrate whether the application of the Article 20 of the Company Law in the Guiding Case No.15 refer to the extension interpretation or the analogical application in the filling of legal loopholes is more reasonable in the methodological nature.From the perspective of comparative law,the third chapter enumerates the origins of the extraterritorial Anglo-American law system and the continental law system on the origin of the denial system and the experience of evolution in practice.It is concluded that the extraterritorial countries have the same legal personality against the creditors of the affiliated companies.The evolution experience shows that the application of personality denial system among affiliated companies in view of the phenomenon that personality confusion between affiliated companies infringes the legitimate interests of creditors are supported by foreign countries.At the end of this chapter,it summarizes the constituent elements concluded by scholars who support the view that personality denial system can apply for affiliated companies.The three constituent elements of personality denial system,namely,subject,behavior and result,affiliated companies need to meet the requirements before they can apply.Chapter four is a review of guiding case No.15 on the basis of the above theoretical analysis.In the first part,by searching the judicial precedents concerning the similar situation of personality confusion among affiliated companies before and after the introduction of guiding case No.15,the applications of personality denial system in judicial practice are analyzed.The second part goes back to case No.15 itself to affirm the valuable part of the judgment.At the same time,it reviews thedeficiencies in the judgment result of the guiding case,such as the allocation of burden of proof and the responsibility of controlling shareholders.It is hoped that the relevant system experience of foreign countries of common law and continental law system can be learned.