The Development of Piercing Veil in Chinese Corporate 1. Introduction of “Piercing the Corporate Veil’ The corporate law doctrine of ‘Piercing the Corporate Veil’ is a longstanding feature of the corporate law of shareholder’s capital contribution in which a corporate shareholder or director is held responsible for the liabilities or debts of a corporation in excess of their capital contributions. Corporation law issues this concept between a corporation and its shareholders that protects shareholders from liability for a corporation’s actions because a corporation is legal entity separate from its shareholders. Once shareholders have made their promised capital contributions to the corporation, they have no further financial liability and corporate debts in excess of their investment in the corporation. Creditors seeking payment of debts or tort victims seeking redress generally can reach only the corporation’s assets, not those of its shareholders. However, courts generally ignore this corporate fiction and treat a corporation’s debt as the debt of the corporation’s shareholders. In doing so, courts “pierce the corporate veil.” Once “pierce the corporate veil authorized by court, contracts of a corporation are not debts of its shareholders. Nonetheless, in order to promote justice and to prevent inequity, courts will sometimes ignore the separateness of a corporation and its shareholders by piercing the corporate veil. The primary consequence of piercing the corporate veil is that a corporation’s shareholders may lose their limited liability. 2. The situation of veil piercing before and after 2006 in China Before the year of 2006, there is no clear doctrine of veil-piercing in China company law, which was operated in a state of uncertainty. With the increasing of the LLC as a corporate form in China during