Gazette Case: Shao Ping v. Yunnan Tonghai Kuntong Industrial and Trade Co., Ltd. and Tonghai Xingtongda Industrial and Trade Co., Ltd.
Applying the veil-piercing rule under the Company Law requires a multi-factor inquiry into the background of incorporation, the shareholders and controllers, key finance personnel, business operations and transaction purpose, tax arrangements, and the context in which the creditor contracted and performed. When a related company is created to continue the debtor's business and the two companies remain mixed in personnel, transaction flows, and tax reporting, commingling may be found and joint liability imposed.
Holding
Applying the veil-piercing rule under the Company Law requires a multi-factor inquiry into the background of incorporation, the shareholders and controllers, key finance personnel, business operations and transaction purpose, tax arrangements, and the context in which the creditor contracted and performed. When a related company is created to continue the debtor's business and the two companies remain mixed in personnel, transaction flows, and tax reporting, commingling may be found and joint liability imposed.