Unit 1

Business Forms and Corporate Personality

Start with what a Chinese company is, why separate personality matters, and how limited liability differs from other business forms.

Before seminar

Prepare Unit 1: Business Forms and Corporate Personality

Work through these public materials before class. The sequence keeps source reading before problem analysis and does not include model answers.

106 linked materials

Core law: 8
Cases: 22
Readings: 75
Exercise: 1

1
Core law
Read core legislation and rules

Start with the statutory, regulatory, and judicial materials that frame this unit.
2
Cases
Review linked cases

Identify the facts, holding, and remedial move before turning to commentary.
3
Readings
Compare readings

Use scholarship, practice notes, and comparative materials to test the Chinese-law position.
4
Exercise
Attempt the public exercise

Apply the sources to a problem before looking at seminar discussion prompts.
- Entity Choice and Personality Map

Reflection prompts

Which rule or case controls the hardest issue in Unit 1?
Where would a Hong Kong, Delaware, UK, Singapore, or transnational comparator change the analysis?
What extra facts would you need before advising a director, shareholder, creditor, or regulator?

Introduction

This unit asks what the Company Law counts as a company and why that classification changes the allocation of risk. Students compare limited liability companies, companies limited by shares, branches, partnerships, and informal business arrangements.

Key Legal Issues

Separate legal personality and independent corporate property.
Limited shareholder liability and the conditions under which it becomes unstable.
The legal representative as the registered human interface between the company, outsiders, courts, and regulators.
The relationship between Chinese statutory language and common-law corporate personality.
Why business form matters for creditors, employees, managers, and investors.

Hypotheticals

A founder signs supply contracts before registration and later argues the company alone is liable.
Three affiliated entities use one bank account, one sales team, and interchangeable invoices.
A Hong Kong holding company operates a Mainland subsidiary and asks whether the parent is insulated from operating liabilities.

Legislation

Begin with the Company Law’s general provisions on company status, shareholder liability, branches, subsidiaries, and legal representatives. Use the Civil Code for legal-person capacity and agency, the market-entity registration materials for public filing, and the partnership and sole proprietorship statutes to show what Chinese law treats as non-company business organization. Compare Hong Kong and UK company legislation for the common-law baseline.

Cases

Begin with the Article 1 cases as boundary examples: one uses the Company Law’s legislative purpose to classify an investment relationship as company membership rather than partnership, while the other refuses to apply the Company Law to a private repair-services contract between natural persons.

Then compare Salomon with the Chinese veil-piercing line. Guiding Case No. 15 remains the starting point for affiliate confusion, and the newer Chinese cases add environmental tort debt, evidential burdens, horizontal veil piercing among affiliates, post-transfer shareholder liability, debt-evasion strategies, and false liquidation by a “professional closure” actor.

The legal representative cases add a second personality boundary: the company is a separate legal person, but it must still act through a registered natural person. The materials move from ordinary attribution of representative acts, through removal and expungement registration, to abuse patterns involving nominee, puppet, elderly, or debt-evasion representatives.

The environmental public-interest cases extend the same unit into corporate social responsibility. They ask when courts should praise remediation, insist on substantive review of settlement terms, or keep ecological-risk duties alive even when a company has formal approvals.

Readings

Use the readings in five clusters. The first cluster asks what company law is for in China: private autonomy, state-mandated norms, shareholder and creditor protection, control regulation, and the socialist market economy setting. The second explains the legal representative’s status, authority, registration, resignation, and expungement. The third turns to ultra vires representative acts, reasonable review, unauthorized guarantees, and attribution of legal consequences. The fourth explains limited liability and veil piercing, including horizontal piercing, evidential thresholds, pollution, and creditor protection. The final cluster treats corporate social responsibility and stakeholder governance under the old and new Company Law.

Unit materials

Legislation

law Mainland China English version

Company Law of the People's Republic of China (2023 Revision)

中华人民共和国公司法

The core statute for Chinese companies, covering legal personality, registration, capital, corporate organs, directors' duties, state-invested companies, bonds, accounting, restructuring, dissolution, liquidation, and liability.

Authority: National People's Congress
Citation: Revised 29 December 2023; effective 1 July 2024
Date: 2024-07-01

Source English version

law Mainland China Official translation

Civil Code of the People's Republic of China

中华人民共和国民法典

The general private-law framework for legal persons, civil juristic acts, agency, property, contracts, tort liability, and remedies that company-law disputes often rely on.

Authority: National People's Congress
Citation: Adopted 28 May 2020; effective 1 January 2021
Date: 2021-01-01

Business Forms and Corporate Personality

Prepare Unit 1: Business Forms and Corporate Personality

Read core legislation and rules

Review linked cases

Compare readings

Attempt the public exercise

Reflection prompts

Introduction

Key Legal Issues

Hypotheticals

Legislation

Cases

Readings

Legislation

Cases

Readings