| In order to prevent the corporate shareholders from abusing of limited liability or legal personality of corporation of the rule, the rule of piercing of the corporate veil is set up. After many years of exploration and appraisal of the rule, in October 2005 China's legislature finally introduced it in the Company Law. But the provision of it in the Company Law was too simple. Furthermore, because the study of specific application is relative lacking, the rule will easily be abused. Where the rules is abused, the company is not properly independent personality that will generate new unfair. This not only does not bring a useful supplement to system of legal personality, and played a role in damage. Therefore, Along with the rule of piercing the corporate veil formalized, in the practice, how to guard against abuse, how to avoid shaking the cornerstone of the company—independent personality and limited liability, should become the focus of attention.In the paper, From the perspective of the application of restrictions on the rule of piercing the corporate veil, the dialectical method, the method of comparison, the method of the value analysis and empirical approach are impose to analysis of related issues. On this basis, the analysis can be divided into macro and micro levels. At the macro level, focusing on the basic theory, the paper examines the rule of the applicable limits, the legal value and practical significance. At the same time, from multi-dimensional perspective the legal basis, discuses the applicable restrictions to the rule .At the micro level, there is the study of specific, important entities and procedural application of the restrictions. Finally, believes that the restrictions are relative. Specifically, the main body of the article is divided into the following four parts:The first part" the Outline of the Piercing of the Corporate Veil", which examines the true meaning of the rule, and reveals the essence of it, that is, the rule regulates conflicts of interest between the shareholders , corporation and creditors . In specific legal relations it denials of the personality of a corporation , and is applied to the company with an independent legal personality, which shareholders abuse limited liability or legal personality of the corporation ; A brief review is made of the piercing the corporate veil in the United States, Britain, Germany, and Japan, and the development of applicative process, pointing out that there are certain differences of the application of the rule in common law and civil law, particularly in the applicative conditions and scope. This relative difference has an important reference on China's legislative and judicial practice; On the basis of the above, discusses the legal value and practical significance of the rule, and the confirmation of the rule in our country's legislation, and points out that in view of China's judicial practice , this is too general and simple , which easily leads to abuse of it, and must be prudent in application of the rule. In other words, it must be to prevent its abuse.The second part "the jurisprudential Analysis of Limited Application of Piercing the Corporate Veil" makes a necessary exploration in this subject from several perspective, and reaches the following conclusions: The legal status of the rule determines that the legislators should strictly limit the scope and conditions of application of it, and the judiciary, in principle, should respect independent corporate personality and limited liability of shareholders; Fairness is the value of objection of the rule, as well as the principle of fairness is the intrinsic scale of value of the rule. Therefore, to prevent the abuse of the rules, the principle of fairness itself calls for appropriate restrictions for the use of the rule; The function of piercing the corporate veil exercises at the expense of the system of limited liability. It is also a social cost. Therefore, from the perspective of principle of benefit, the application of the rule must under certain restrictions; The healthy development of the market economy can not be separated from the necessary interventions of the jurisdiction, but its need is an appropriate intervention. In other words, according to the reality of the social and economic development, the borders of power to judicial intervention must be reasonably determined upon the application of rule.The third part "the Substantive Restrictions Apply to the Piercing the Corporate Veil" discusses the rule from the perspective of requirements of piercing the corporate veil .First of all, on the types of corporations of the application of the rule, points out that the corporation being in establishment and the corporation with serious flaw are not the targets of application of the rule. But in accordance with China's specific national conditions, stock company should not be foreign to the theory, and should be applied to with bold and careful by the law. Secondly, through examining types of conducts of abusing of legal personality, reveals the corresponding definition and restrictions of application of the rule. The finding of acts of the notable lack of operating capital, should be under the constraints of the criteria of term which the credit is to the company, not term which the corporation is established, but the significant shortage which the corporation is confronted at the normal operation should not be within the range of application of the rule; The scale or the risk of operating of corporations should be paid attention to. Although it is not necessarily linked that the capital of company is significantly less than the corporation's minimum registered capital, the scale of operation and operational risk are the key factors that leads to that a corporation's capital is significantly undercapitalized; The different nature of creditors has crucial influence on the application of the rule in this case. The attention should be paid to the difference between voluntary and non-voluntary creditors, because in respect of the voluntary creditors, a simple undercapitalized factor that usually does not lead to piercing the corporate veil. In respect of defining conducts of avoiding legal obligations, it is mainly the restrictions and limitations of object or premise of these conducts. The premise of avoiding legal obligation is that the conducts of avoiding legal obligation are constituted through the abuse of legal personality of company or limited liability of shareholder .The object of the conducts of avoiding legal obligations is that the legal obligations avoided must be legally enforceable norms of obligations set by the law. In the rule of piercing the corporate veil the contractual obligations avoided, only refers to the agreed obligations by both sides, not the accompanying obligations under the law. The definition of the companies which do not comply with the legal forms, mainly refers to the restrictions of confusing assets and affairs of company, or the application of excessive powers and rights of control of company. As to the former, it must be a comprehensive look into the content and extent of the confusing of assets and affairs of company, so a single, or a non-critical features of confusing assets and affairs of company does not lead to application of the piercing the corporate veil; For the latter, the degree of controlling of the business of the company ,and the durable disposal, as well as for whether the controlling shareholders obtain the illegitimate interests ,or whether the company's creditors and minority shareholders cause the damage by the controlling their corporation , should completely be take into account. Finally, the restrictions of definition of the result of the damage are analyzed. The result of the damage must be a certain degree of substantial damages, and a direct causal relationship must exist between the result of damage and the abuse of corporate personality, or the limited liability of shareholders.The fourth Part "the Procedural Restrictions Apply to the Piercing the Corporate Veil", in which the procedural restrictions of creditors in the exercising the right to request compensation are explored. Firstly, the limitation of the parties is examined under the lifting of the corporate veil, namely, a shareholder or a company could not claim for lifting of the corporate veil itself ;The piercing the corporate veil only applies to the responsibility of shareholders, not the responsibility of directors and other senior management; For defining of control shareholders, we should pay attention to the proportion of shares, the amount of shares, the actual power over management of business, and other factors. Secondly, the implementation of the civil procedures should not apply to the piercing the corporate veil. Finally, the restrictions of the personality of the abuse of the presumptive system is discussed .Because these is an general and special relationship between the section 64 and the section 20 in the Company Law , the presumptive system only applies to the case of confusing of assets and affairs in an one-man company, not applies to other cases. Therefore, the abuse of the rule through improper ONUS should be prohibited. |
