Practical exploration of uncovering the corporate veil and holding shareholders and other related parties jointly liable

Article 23 of the new Company Law stipulates: 'If a shareholder of a company abuses the independent status of the legal person and the limited liability of shareholders, evades debts, and seriously damages the interests of the company's creditors, they shall bear joint and several liability for the company's debts.' According to this provision, how creditors can pursue the joint and several liability of shareholders and other related parties who abuse the independent status of the legal person when filing a lawsuit has attracted much attention.

On the afternoon of August 30, 2024, at Denghu Classroom, Lawyer Yang Wuquan from our firm will bring you a practical discussion on lifting the veil of the company and holding shareholders and other relevant parties jointly liable.

Firstly, Lawyer Yang introduced today's topic through a case study and explained the concept of unveiling the corporate veil to everyone.

Subsequently, Lawyer Yang summarized the common situations of abusing the independent status of corporate legal persons:

1. Personality confusion: The fundamental criterion for determining whether there is confusion between the personality of a company and that of its shareholders is whether the company has independent intentions and independent property. The main manifestation is whether the property of the company and that of its shareholders are confused and indistinguishable.

2. Excessive domination and control: The controlling shareholders of a company excessively dominate and control the company, manipulate the decision-making process of the company, completely lose its independence, become a tool or shell of the controlling shareholders, and seriously damage the interests of the company's creditors.

3. Significant capital shortage: After the establishment of the company, the actual amount of capital invested by shareholders in the company during the operation process is significantly mismatched with the risks implied by the company's operations. Shareholders using less capital to engage in operations beyond their capabilities indicate a lack of sincerity in engaging in company operations. Essentially, they maliciously use the company's independent personality and limited liability of shareholders to transfer investment risks to creditors.

Finally, based on the cases of (2020) Yu 01 Min Zhong 16156 and (2021) Hu 01 Min Zhong 7262, Lawyer Yang conducted a detailed analysis and argumentation on the issues in the cases.

After listening to Lawyer Yang Wuquan's interpretation, every colleague felt that they had benefited greatly. Thank you very much for Lawyer Yang Wuquan's sharing today. We look forward to learning more useful knowledge through Denghu Classroom!