| Corporation is one of the most important business entities in the market economy. The corporate personality system provides great incentives to investors and promote economic development by providing an independent personality to the corporation and limiting the liability of the stockholders. The corporate personality system plays unique roles hi quickly amassing capital, efficiently controlling capital, reducing investment risks,maximizing profits, etc., this is why it sees rapid development worldwide.However, the advantageous position of the shareholders of the corporation is bound to result in the danger of shareholders (shareholders with controlling shares) trying to intermingle the corporate conduct with their own personal wills, hi their attempts to maximize their interests, the shareholders with controlling shares will go all out to utilize their rights that their controlling shares give them and their dominant position in the corporation to engage in conduct that is abusive to the corporate personality, and hurt the interests of creditors, so as to achieve the purpose of transferring the cost of business risks to the creditors.With the rapid development of the economy, the various problems of the corporation that occur with a regularity in the business dealings between market entities, problems that the corporate personality system has produced, are increasingly evident and threatens to develop still further. But we cannot be totally negative towards this system for those problems. The only feasible solution is to search far a system that can bring these problems under effective control while preserving the corporate legal personality system itself. This is where the concept ofindisregarding the corporate personality comes in.The concept of disregarding the corporate personality refers to the legal practice in which, while recognizing the legal personality of a corporation, disregard in some specific legal situations the corporate personality and the limited liability of shareholders and directly hold the persons hiding behind the corporate veil responsible. This concept dates back to the 19th century America, it became popular in UK and Germany earlier in the 20th century, and was adopted by Japan hi the 1950s. This concept effectively helps to achieve equitableness through making afterwards remedies to the negative effects the corporate legal personality system produced, and thus promotes the development of the corporate system.In our country, the concept of disregarding the corporate personality has not found recognition in law yet. In the realities of economic life, conducts that abuse the corporate personality abound. The legislation still lags far behind. To deal with the notable problems of the abuse of the corporate personality that occur in practice, and with the ami to clear up debts and protect the creditors, some individual normative documents by the government have to step over the principle of limited liability for the stockholders, and hold the stockholders who abuse the corporate personality directly responsible for the corporation's debts. This is done based on the doctrine of the subrogation obligations to pay debts as contained hi the law of obligation.These rules only absorbed some rational portion of the theory of disregarding corporate personality, but differs hi essence with the theory itself. Because there are no clearly defined rules governing these issues,in the judiciary practice, judges make decisions based on their own personal understanding of the concept and employing some legal techniques, which is detrimental to a uniformedIVjudicature nationwide, resulting in deviations from justice and fairness that the law is supposed to pursue.In view of this, this article attempts to give a preliminary discussion of the theory on disregarding of the corporate personality, and make a comprehensive analysis of the necessity of establishing this mechanism, and also puts forward my own suggestions regarding the establishment of this mechanism on disreg...
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