Research On The Legal Issues Of The Substantive Merger And Bankruptcy System Of Affiliated Enterprises

Associated enterprises engage in production and operation activities in the form of enterprise groups,which have unique advantages in cost saving and efficiency improvement,so as to achieve the operation goal of low cost and high profit.This form not only conforms to the law of economic development,but also is not illegal.In the contemporary society with the continuous growth of social economy and steady progress of science and technology,the scale of related enterprises keeps expanding,and new problems also appear.Control relation tends to exist between affiliated enterprise,it will seriously damage the interests of creditors and the social economic order when the associated enterprises abuse this control relations.In this case if we still insist on independent affiliated enterprise bankruptcy,the serious damage to hinder the realization of entity justice and procedural justice embodies in: Affiliated enterprise assets resulting from the highly confused the personality confusion,assets and liabilities could not be distinguished or differentiated and the cost is too high,the cost is not only the economic cost,but also the human cost,the high cost will lead to bankruptcy proceedings cannot advance,because clarifyingy work for the bankruptcy of the assets and liabilities is just the first step;In addition,if we insist on individual bankruptcy,some debtors with ulterior motives will take advantage of loopholes in the law to escape the debts they should bear,and the interests of creditors will no longer be protected by the law.Because of these complicated problems arising from the bankruptcy of affiliated enterprises,the substantive merger system is an effective solution.The substantial merger system originated from the judicial practice of the United States and was created to solve the problems of bankruptcy of related enterprises.The system is actually to merger all associated companies as a whole,ignore the debts between each member,package their property,then all members of the creditors can get fair pay off in the legal order in the same program.Since the implementation of China’s Enterprise Bankruptcy Law in 2007,the substantive merger system has gradually become an effective way and an important approach to solve the high degree of personality confusion in affiliated enterprises.But so far,the system has not been embodied in the bankruptcy law in our country,although in the national work conference on court for bankruptcy judge notes in 2018 talks about the attitude of the system shall be prudent,but these provisions are more abstract,it is difficult to grasp concretely in practice.In practice,many courts will adopt the substantive merger system to hear bankruptcy cases of affiliated enterprises,but the applicable standards,the procedures and the subjects of the application are not clear,and there are difficulties such as whether the affiliated enterprises that have not applied for bankruptcy can be directly included in the scope of substantive bankruptcy.Issues caused by legal vacancies,such as unclear issues and excessive court discretion,should arouse our attention and ponder.The gaps in the legal system and the exploration of practical operations have determined that the substantive merger system is not only a hot issue,a frontier issue,but also a theoretical issue,and the bankruptcy cases of affiliated enterprises that be applied the substantive merger system are often be major and important cases,such as the bankruptcy of Hainan Airlines,which involved the substantial merger of 321 companies,was the largest merger bankruptcy case in history.Therefore,if a fair,just,reasonable and legal judgment cannot be made on the bankruptcy of an affiliated enterprise,it will cause a serious waste of social resources and great damage to the credibility of the judiciary.Based on this,there is an urgent practical need to study the legal issues of the substantive merger system.We need to combine the judicial practice in recent years and learn from the advanced experience abroad,in order to understand the substantive integration system better and promote the improvement and development of the system.