Research On The Horizontal Personality Denial System Of Affiliated Companies

The independent personality of the company and the limited liability of shareholders are the two characteristics of the company legal person system.However,in practice,these two characteristics are easy to be abused by shareholders,which damages the interests of corporate creditors,and this phenomenon is even worse in affiliated companies.As a new form of corporate collectivization under the rapid development of modern economy,affiliated companies are in a dominant position in market competition because of their close relationship network.As a new form of corporate group,there are still deficiencies in the provisions of Chinese law.China’s Company Law incorporated the corporate personality denial into it in 2005,but it aimed at the situation of taking shareholders as the object of regulation,that is,the denial of vertical corporate personality,while it was not clear about the denial of horizontal corporate personality of affiliated companies.In 2013,the judicial committee of the Supreme People’s Court issued guidance case No.15,which broke through the scope of application of the traditional personality denial system and applied the personality denial to affiliated companies.The court’s reasoning on the gist of the judgment in the No.15 guidance case was too brief,which led to a series of problems and disputes after the release of the case: 1.The issue of No.15 of the court’s brief judgment is not applied in practice due to the lack of uniform legal basis and gist in the case series;2.The standard of identifying the constituent elements of personality confusion is not clear;3.Although the Minutes of The National Court’s Civil and Commercial Trial Work Conference,Article 11 made relevant provisions on the denial of the legal person personality of affiliated companies,but it was limited to a simple overview,so it could not really deal with the frequent and prominent problems in judicial practice.In order to make the system play a better effect in practice,this paper believes that it is necessary to improve the horizontal denial system of corporate personality of affiliated companies in China: first,the relevant contents of the company law or judicial interpretation should be supplemented and improved;Secondly,clarify the identification standard of horizontal corporate personality confusion of affiliated companies;Finally,reasonably allocate the burden of proof.