Analysis of the Evolution and Impact of Article 23,Clause 2 of the Company Law in 2024
The doctrine of Piercing the Corporate Veil,which originated from the common law system,was offi-cially introduced into China's Company Law in 2005.The introduction of this doctrine initially addressed only the issue of piercing the corporate veil vertically.As the market economy environment and corporate governance structures increasingly diversify and complicate,cases where shareholders abuse the separate legal status of the cor-poration and limited liability through control of multiple corporations to evade debts are on the rise,causing sig-nificant harm to the interests of corporate creditors.To remedy this legal loophole,Article 23 of the new Compa-ny Law,which will be implemented in July 2024,has been introduced.This article discusses the horizontal pierc-ing provision,legislative reasons,institutional impacts,and other aspects in order to provide a more comprehen-sive understanding and insight into the system of Piercing the Corporate Veil in Chinese company law.
Piercing the Corporate Veilvertical piercinghorizontal piercing
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