Judicial Application Of "Piercing The Corporation's Veil" Rule

The principals of corporate independent personality and limited liability are the basis of corporate law. These two principles help to keep the balance between investors and creditors. However, creditors'interests will be impaired if these principles are absolute. In order to insist on the independence of corporate personality and protect the interests of creditors from being damaged, some western countries created Piercing the Corporation's Veil Rule. Piercing the Corporation's Veil Rule is a legal measures ,which means in order to obstruct the company independence legal personality been abused by controlling shareholder ,and protect the company creditor benefits and public benefits, on the particular facts of the specific legal relationships, deny company and its back controlling shareholder's independent personality respectively and control shareholder's limited liability, order the company controlling shareholder(include natural person shareholder and legal person shareholder) to bear the direct responsibility for company's creditors and social and public interests ,to achieve the requirement of fairness and justice.Although we have established the Piercing the Corporation's Veil Rule in 2005 in legislation that is significant, the provisions and precedents are not enough. The judicial practice and theoretical studies are still scarce. introducing and drawing on the experience of Piercing the Corporation's Veil Rule of Western Countries. introduced legislation in a foreign country, Elements of application of Piercing the Corporation's Veil Rule and application occasions. focused on the analysis of the applicable legislation, the state of the administration of justice in china, so that and laying a theoretical foundation to improve the system. expounded on the idea of improving the system and the specific legislative idea. In view of Piercing the Corporation's Veil Rule involves many aspects and not exhaustive. Therefore, I concentrate on the following questions: such as, 1. Based on China" s current legislative system and judicial status, judicial interpretation to improve the system is more feasible. 2. The allocation of the burden of proof when apply Piercing the Corporation's Veil Rule 3 .As a foreseeing theoretical concern,this system should be used cautiously and correctly,and seriously consider relative issues faced in practice, etc.