The Company Law of People's Republic of China (PRC) has corresponding provisions on this:
Article 14 A company may establish a branch, and it shall apply to the company registration authority for registration and obtain a business license. A branch company does not have legal person status, and its civil liability shall be borne by the company.
A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law. Companies can invest in other enterprises; However, unless otherwise provided by law, investors shall not be jointly and severally liable for the debts of the invested enterprises.
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Relevant clauses of People's Republic of China (PRC) Company Law:?
Article 20 Shareholders of a company shall abide by laws and articles of association, exercise their rights according to law, and shall not abuse their rights to harm the interests of the company or other shareholders; The company's independent legal person status and the limited liability of shareholders shall not be abused to harm the interests of the company's creditors.
Shareholders of a company who abuse their rights and cause losses to the company or other shareholders shall be liable for compensation according to law. Shareholders of a company who abuse the independent status of a company as a legal person and the limited liability of shareholders and seriously damage the interests of the company's creditors shall be jointly and severally liable for the company's debts.
Article 21 The controlling shareholders, actual controllers, directors, supervisors and senior managers of a company shall not use their related relationships to harm the interests of the company. Anyone who violates the provisions of the preceding paragraph and causes losses to the company shall be liable for compensation.
Baidu Encyclopedia-People's Republic of China (PRC) Company Law