Research On The Reverse Denial Of Corporate Legal Personality

In the 2005 revision of the Company Law,China stipulates for the first time that if a shareholder of a company abuses the independent status of the company as a legal person and the limited liability of the shareholders to evade debts and seriously damage the interests of the company’s creditors,he shall bear joint and several liability for the company’s debts.This provision shows that China has established a system of denying the personality of corporate legal persons.However,in the face of new problems arising in the company’s business practice activities,such as natural person shareholders or corporate shareholders taking advantage of the independent personality of the company’s legal person to privately transfer property or illegally transfer benefits,evade their own debts,and seriously damage the interests of their creditors,China’s current company law does not provide for this,and the existing systems such as equity enforcement and creditors’ right of revocation cannot replace such problems,so there is confusion in the legal basis of court judgments in judicial practice.The reason behind this is that China has not established a reverse denial system for the personality of a corporate legal person,and the scope of the provisions of the Company Law on the system of denying the personality of a legal person is too narrow.The reverse denial theory of corporate personality originated in the United States,and various countries have established this system one after another.At present,China has established a system of denying the personality of a corporate legal person,but has not established a reverse denial system of the personality of a corporate legal person,and there are differences between the two systems in terms of the subject of legal relations,the flow of responsibility and the protection of interests.Therefore,the existing legal systems,such as the corporate legal person personality denial system and equity enforcement systems,cannot effectively solve the problem of shareholders using the independent status of the company legal person to evade debts and harm the interests of creditors.From the perspective of judicial practice,Chinese courts have confused adjudication basis in cases involving reverse denial of the personality of corporate legal persons.Some courts apply Article 3 of the Company Law,some apply Article 20,Paragraph 3 of the Company Law,and some courts even apply the basic principles of civil law to adjudicate.This phenomenon undermines judicial authority and needs to be addressed urgently.In recent years,China has a trend of expanding the scope of application of the denial of corporate personality,and at present,China has issued the second deliberation draft of the revised draft of the Company Law,which intends to include the denial of personality between affiliated companies within the scope of the law.Since the company is liable for the personal debts of the shareholders after the reverse denial of the personality of the company’s legal person,the interests of the company’s creditors and the interests of other shareholders of the company may be adversely affected,which will increase the difficulty of the company’s transactions and reduce the shareholders’ trust in the company system.Therefore,it is necessary to protect the interests of the company’s creditors and the company’s bona fide shareholders.In this regard,it is recommended to establish an interest hierarchy and set up the interest hierarchy in the order of the company’s creditors,bona fide shareholders and shareholder creditors.In the future,the revision of the Company Law and the promulgation of relevant judicial interpretations need to achieve the following three points: continue to expand the scope of application and build a reverse denial system for the personality of corporate legal persons;The applicable situations use generalization,enumeration and open legislative techniques,leaving room for new situations that arise later;Clarify the applicable restrictions on the reverse denial of corporate personality,and leave the necessary discretion to the judge within the scope of the conditions.