Practice of Disregard Theory of Corporate Personality in Taiwan
| Autor: | I-tzu Lai, 賴宜孜 |
|---|---|
| Rok vydání: | 2011 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 99 The doctrine of disregarding a corporation''s separate and independent existence is commonly referred to as "piercing the corporate veil." The corporate entity is distinct, although all or a majority of its stock is owned by a single individual or corporation, or although the corporation is a so-called "family" or "close" corporation. In certain circumstances, courts can pierce the corporate veil, that is, disregard the corporate entity and treat the shareholder and his or her corporation as a single entity. In such cases, the corporation is treated as the alter ego of the shareholder, thereby rendering the shareholder liable for the obligations of the corporation. As our country is regulated by legislative statutes or executive branch action, most judges refuse to apply the disregard theory of corporate personality because it is developed in common law counties, such as the U.K. or the U.S. This seems reasonable in face. However, there are court decisions in Taiwan which did pierce the corporate veil, although they may not be in the name of applying “the disregard theory of corporate personality”. In fact, what we says“the disregard theory of corporate personality” is not a simple theory itself. It consists of many different indexes or doctrines, such as alter ego doctrine. While the factors that will justify piercing the corporate veil vary from jurisdiction to jurisdiction, a number of courts will disregard the existence of a corporate entity when the plaintiff shows: (1) control, not merely majority or complete stock control, but complete domination, not only of the finances, but of policy and business practice in respect to the transaction so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; (2) that such control was used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or to commit a dishonest and unjust act in contravention of the plaintiff''s legal rights; and (3) that the aforesaid control and breach of duty proximately caused the injury or unjust loss. Factors that many states consider include: (1) whether the shareholder sought to be charged owns all or most of the stock of the corporation; (2) whether the shareholder has subscribed to all of the capital stock of the corporation or otherwise caused its incorporation; (3) inadequate capitalization; (4) whether the shareholder uses the property of the corporation as his or her own; (5) whether the directors or executives of the corporation act independently in the interest of the corporation or simply take their orders from the shareholder in the latter''s interest; and (6) whether the formal legal requirements of the corporation are observed. It is not always necessary to prove illegality in order to establish excessive control of the corporation by shareholders so as to warrant the imposition of personal liability on the shareholders for the corporation''s debts. Because there is no single factor that could justifies piercing the corporate veil alone, a careful review of the entire relationship between various corporate entities and their directors and officers may reveal that such an equitable action is warranted. The doctrine of piercing the corporate veil is the rare exception, applied in the case of fraud or certain other exceptional circumstances, and is usually determined on a case-by-case basis. It is equitable in nature. The corporate veil may be pierced and the shareholder held liable for the corporation''s conduct when, inter alia, the corporate form would otherwise be misused to accomplish certain wrongful purposes, most notably fraud, on the shareholder''s behalf. It is limitation on the accepted principles that a corporation exists independently of its owners, as a separate legal entity, and that the liability of the owners for the debts of the corporation is limited. The doctrine of piercing the corporate veil is typically employed by a third party seeking to go behind the corporate existence in order to circumvent the limited liability of the owners and to hold them liable for some underlying corporate obligation. Thus, an attempt of a third party to pierce the corporate veil does not constitute a cause of action independent of that against the corporation; rather, it is an assertion of facts and circumstances that will persuade the court to impose the corporate obligation on its owners. It is a means of assessing liability for the acts of a corporation against an equity holder in the corporation. It is not itself an action but is merely a procedural means of allowing liability on a substantive claim. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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