Study On Reverse Denial Of Corporate Personality

Company Law in China has clearly established the system of denial of orate personality. To a certain extent, this rule regulates the abuse of the corporate personality and the shareholder limited liability by the shareholder and also corrects the unfair. However, in the complex market economic life, the abuse of corporate personality has diversified forms, just relying on this system to exclude shareholders abuse the company legal person personality and the shareholder limited liability cannot achieve real equality and justice. Reverse denial of the corporate personality is to deal with these special cases. But in the current, we are short of theoretical basis and judicial standard about how to use the system of reverse denial of corporate personality. Therefore, it is necessary to study it.The current law has no provisions about the system of reverse denial of corporate personality, but lots of this type of cases appears in judicial practice. Due to the lack of clear legal provisions, different courts have different results. Someone support reverse denial for maintaining equity and justice; others stand by that the current law has no provisions; we have no reason to support the reverse denial.Reverse denial of the corporate personality which is company’s specific shareholders considering the various reasons ask to ignore corporate personality and regard the company and the shareholders as a body, so that the company can enjoy the exemption or protection have only by the shareholders; or when the shareholders abusing the independent personality of the company, evading personal debts and damaging the interests of creditors, the creditors of the company specific shareholders have the requirement of regarding the shareholders and the company as a whole, thus forcing the company to take responsibility for the personal debt of that particular shareholders. Based on the subject who denies the legal person and the different positions of its rivals on, the system of reverse denial of the corporate personality can be divided into insider and outsider reverse denial of corporate personality specifically. The system as a supplement of traditional denial of the corporate personality, both belong to the exception to the general principles of the independence of corporate personality. They have obvious differences on the main body, responsibility flow and the suitable situation. The reverse denial of corporate personality has its unique value on correcting social fairness and improving the denial of the corporate personality.The insider reverse denial of corporate personality was first established and developed in the American case law. There are no rules regulating the system in our country up to today, but it plays its unique on correcting social fairness and justice and safeguarding public interests. It is these affections that make its existence reasonable. And it still has space to apply to one-person or a closed limited liability company. As a means of defense, the application must meet high personality confusion between company and shareholders. Meanwhile, other conditions, such as the law of higher value which higher than general creditor’s rights, the aim of achieving a specific policy or the guarantee of public interest, are also needed. Only when the rights or public interests advocated by shareholders and stakeholders in a particular case do have higher social value or are good for realizing specific policy goals, it is able to reverse retroactively the independent status between company and shareholders.The case of outsider reverse denial of corporate personality has already appeared in the judicial practice of our country. However, there is no united recognition and standard for the court to handle such cases. In order to meet the needs of practice, the court need to clarify the suitable conditions of body, behavior, subjective and result. When the company’s assets cannot pay off the debts of shareholders and corporate creditors at the same time, it is necessary for the court to combine the proportion of no-fault shareholders’ capital contribution, the degree of controlling corporation from specific shareholders and no-fault shareholders whether to take an active part in the action to measure the balance of interests between shareholders and creditors no-fault shareholders. And the actual conflict of interest almost never occurs in the creditors of shareholders and the creditors of the company.