Guangdong Model Case: Jiangmen Fengpin / Weichang commingling

Reference Case: Guangzhou Dashun Hardware Factory v. Jiangmen Fengpin Company, Jiangmen Weichang Company, et al.

The Guangzhou Intermediate People's Court held in a Guangdong Greater Bay Area model case that Jiangmen Weichang and Jiangmen Fengpin, both under the same actual controller, had become commingled because they shared facilities, personnel, and financial management, while assets and products were transferred free of charge when Weichang could not pay its debts. Relying on Guiding Case No. 15, the court imposed joint liability on Fengpin for Weichang's unpaid purchase price.

Holding

The Guangzhou Intermediate People's Court held in a Guangdong Greater Bay Area model case that Jiangmen Weichang and Jiangmen Fengpin, both under the same actual controller, had become commingled because they shared facilities, personnel, and financial management, while assets and products were transferred free of charge when Weichang could not pay its debts. Relying on Guiding Case No. 15, the court imposed joint liability on Fengpin for Weichang's unpaid purchase price.

Issues

commingling among affiliated companies under the same actual controllergratuitous transfer of products and equipment to evade debtoverlap in personnel, business, and finance making assets indistinguishable