Recently, Beijing King&Capital Law Firm, represented by Mr. Zhu Yuanxiao and Mr. Shi Nannan, won the case of denial of corporate personality. In this case, the court successfully recognized the “vertical and horizontal double penetration of corporate personality”, and ruled that the actual controller of the debtor company and its controlled affiliates should be jointly and severally liable for the tens of millions of dollars owed by the debtor company, which strongly safeguarded the client's legitimate rights and interests.
I. Case study and breakthrough ideas
In this case, company B owes the client company A for a long time, but due to company B's own solvency, the client once did not start the litigation process. After Zhu Yuanxiao and Shi Nannan intervened, they quickly began to sort out the case and analyze the law, and keenly identified that this case not only could claim the payment from Company B, but also had the space to pursue the legal responsibility of its actual controller and related party, Company C.
Based on the new company law article 23 on legal personality denial of the latest provisions, the lawyer team put forward “vertical denial + horizontal denial” dual path of recourse: vertical penetration to the actual controller, horizontal expansion to its control of the associated companies, so as to build a more three-dimensional program for the realization of the client's claims. This professional judgment and strategy design eventually led to the client's decision to file a formal lawsuit.
II. Professional Advancement and Successful Achievements
In the process of handling the case, evidence collection and legal argumentation became the key challenges. In terms of evidence, based on the existing clues, the attorney successfully applied to the court for access to the bank account flow between companies B and C, obtaining the key evidence to confirm the high degree of mixing of the two companies' properties. At the legal argumentation level, the lawyer team not only solidified the subject identity of the actual controller through public channels and relevant documentary evidence, but also based on the fact that this case was the first case involving “horizontal denial of legal personality” heard by the local court after the implementation of the “New Company Law”, the lawyer systematically sorted out the relevant theoretical viewpoints and adjudicative cases to provide sufficient jurisprudence and evidence for the court to make a decision. The court's decision provided sufficient legal and practical support, and effectively resolved the judge's determination concerns in the decision.
In the end, the court adopted the attorney's opinion and determined that the legal personality of company B should be vertically and horizontally denied, and decided that the actual controller of company B and company C under its control should be jointly and severally liable for all the payment and interest owed by company B to company A. The court also decided that the actual controller of company B should be jointly and severally liable for all the payment and interest owed by company B to company A. All the litigation requests and amounts raised by the client were fully supported by the court and none of them were rejected, realizing efficient and comprehensive recovery of the claims.
Typical significance and institutional value
The “horizontal denial of legal personality” is an important new element in the New Company Law, aiming to regulate the shareholders' abuse of the independent status of the legal person and limited liability, and to evade debts by controlling several affiliated enterprises, which provides a powerful legal weapon for creditors.
It is noteworthy that this case is the second case of horizontal denial of legal personality represented by a team of lawyers after the implementation of the new law. In the first case, the debtor in the first hearing that the initiative to mediate and full settlement of debts; This case is further through the form of judgment to establish the “vertical + horizontal” double penetration of the rules of adjudication, become the new law under the background of another representative case. The success of the two cases not only highlights the professional ability of the lawyers in this field, but also highlights the positive effect of the legal personality denial system in practice - effectively curbing debt evasion, effectively safeguarding the interests of creditors, and maintaining the integrity of the market and the rule of law.
