1, the concept and characteristics of multinational corporations
The research object of this paper is multinational corporations, so it is necessary to make clear what multinational corporations are and what their characteristics are. This makes it easier for us to analyze and solve problems.
1. 1 the concept of multinational corporations
What is a multinational company? At present, there is no uniform legal definition in the world. At first, people called multinational companies "multinational companies, global enterprises, multinational enterprises" and so on. 1983, when the United Nations Commission on Transnational Corporations drew up the Code of Conduct for Transnational Corporations, the definition was accepted by most countries, and it was as follows: a transnational corporation refers to an enterprise composed of entities located in two or more countries, regardless of the three-dimensional legal form and scope of activities; The business of such enterprises is run through one or more activity centers according to a certain decision-making system, and they can have consistent policies and strategies; The entities of an enterprise are linked by ownership or other factors, in which one or more entities can exert significant influence on the activities of other entities, especially by sharing knowledge, resources and responsibilities with other entities. [3]
1.2 characteristics of multinational corporations
1.2. 1 transnational
The transnational nature of multinational corporations mainly refers to their characteristics of being based on their own countries and engaging in transnational operations, rather than requiring their constituent entities to have different nationalities. [4] Two or more companies that make up a multinational company must be located in different countries, and their basic models are parent company and subsidiary company, head office and branch company. Generally speaking, the parent company or head office is located in a certain country, the home country is the base of the enterprise group, and the subsidiaries or their own branches are located in other countries (also known as the host country).
1.2.2 global strategy and centralized management
Because the parent company and subsidiaries of multinational corporations are located in different countries, when making strategies, multinational corporations no longer focus on a branch or a certain region, but proceed from the interests of the whole company, take the world market as the competition goal, and consider the company's production, sales and development policies and strategies from a global perspective in order to obtain the maximum and long-term high profits. For example, in China, foreign multinational companies attach great importance to consolidating and developing their competitive advantages by using intellectual property strategies and tactics, and seize the commanding heights of the world market as a means. Especially with the emergence of "technology-patent-standard" strategy and strategic technology alliance based on intellectual property rights, the characteristics of multinational companies seeking greater advantages and profits in market competition by using intellectual property rights are more obvious and prominent. [5]
1.2.3 internal integration of the company
The legal personality of multinational corporations should include two aspects. On the one hand, it is the legal person qualification of the parent company and the entity that constitutes the multinational company; On the other hand, it is the question of whether multinational corporations can become subjects of international law. [6] From the aspects of central control and internal integration activities, it can be said that transnational corporations have the characteristics of enterprises and are an economic entity; But not a legal entity.
2. The historical development and important role of transnational corporations.
Marxist philosophy holds that everything has its development process, and multinational companies are no exception. Since the analysis and research of transnational corporations should start from its development process. In recent decades, multinational corporations have occupied an important position in the world economy, and their activities have had an important role and influence on the development of the world economy. They have greatly promoted the development of the world economy and accelerated the pace of global integration.
2. 1 Historical origin of multinational corporations
Transnational corporations are not "ancient", but the product of the high development of capitalism in the monopoly stage. Their rapid development was largely a phenomenon in the early 1950s. After the Second World War, the process of capital accumulation and concentration in developed capitalist countries was further strengthened, and the rule of a few large enterprises was formed in many production sectors, especially emerging industrial sectors. Because of oligarchy, competitors are evenly matched, monopoly organizations can only use their own advantages in capital, technology and management ability to transfer their capital abroad to find a way out, and those countries and regions with cheap raw materials and labor and broad markets will naturally become the main targets of monopoly enterprises' foreign investment. [7] In addition, with the wide application of new scientific and technological achievements in transportation, transportation, production and other departments, international economic exchanges are getting closer and closer, the socialization of production is increasing, and the internationalization of production and capital is strengthening. With the increasingly fierce competition in the international market, the needs of economies of scale and the accelerated development of large enterprises to diversify, transnational production activities have become a new trend of world economic development.
2.2 The role of transnational corporations
According to statistics, about 40,000 multinational companies and 250,000 foreign branches have formed transnational production and service networks.
The network is expanding day by day, and an international production system organized and managed by multinational companies is forming. Multinational corporations are the core organizers of international economic activities and become important promoters of international economic integration. Multinational companies are the main undertakers of technological development, and often combine capital, technology, training programs, trade and environmental protection to carry out a package of tangible and intangible comprehensive assets, thus stimulating economic growth. Multinational companies make comprehensive use of the organization and management ability of global production factors and conditions, making them potential and efficient production organizers. Therefore, in terms of economic impact, multinational corporations have played a vital role in global resource allocation, improved the competitiveness of home countries and host countries, and promoted the process of economic integration. The integration of various economic activities of transnational corporations also means that the policies of host countries need to respond to the extensive contributions that these companies may make accordingly. In terms of policies and systems, the regionalization strategy of multinational corporations' production has accelerated the trend of regional integration. Once some countries are brought into this regional production network, deeper pressure of policy integration will arise. This means greater policy coordination and policy convergence among neighboring countries. As an institution in an integrated organizational structure with many connections with the world economy, transnational corporations play a decisive role as direct coordinators of international economic activities. [8]
3. The responsibility of the parent company of a multinational company to its subsidiaries and its legal basis.
Recalling the above-mentioned Haagen-Dazs "dirty kitchen" incident, Kraft biscuits containing genetically modified ingredients and other 12 events that weakened the responsibility of multinational corporations, we have to pay attention to the responsibility of the parent company of multinational corporations.
At present, different countries have the following different approaches and views on the responsibility of the parent company of multinational corporations: (1) Strictly abide by the principle of limited liability. This view holds that the parent company and its subsidiaries are generally independent legal entities. According to the principle of limited liability of legal person, internally, shareholders are limited to the amount of capital contribution, and the company is liable with all its assets. In other words, the parent company and its subsidiaries are relatively independent. The parent company should not be responsible for the debts of its subsidiaries. (2) Comprehensive responsibility theory. This view holds that multinational corporations should be regarded as a unified entity, and the damage caused by any part of the entity can be attributed to the whole entity. In other words, no matter which subsidiary violates the law, the parent company that established it should be responsible. (3) Single enterprise theory. According to the theory, although the parent company is an independent legal person in law, if the subsidiary has no operational autonomy, the parent company constitutes a single enterprise, and the parent company should be responsible for the debts of the subsidiary. In other words, the parent company and the subsidiary company are two independent legal entities. Under special circumstances, if the subsidiary is dominated and controlled by the parent company and no longer has independence, the court may think that the subsidiary is only the "incarnation" of the parent company, so it is appropriate to lift the veil of the company and deny the independence of the company, and the parent company is responsible for the debts of the subsidiary company.
In this regard, China's "Company Law" stipulates that "foreign companies shall bear civil liability for the business activities of their branches in China". However, when paying off specific debts, the working capital allocated to branches should be paid off first, and the insufficient part should be paid off by the parent company. The author believes that it is still of great significance to implement the principle of limited liability to multinational companies. While implementing the principle of limited liability to multinational companies, we should "unveil the company veil" under special circumstances.
3. 1 It is of great significance to implement the principle of limited liability for multinational companies.
For a country, there are several reasons: (1) is conducive to encouraging multinational companies to invest. If a country's laws stipulate that the branches of foreign companies should apply the principle of unlimited liability, this will discourage most enterprises and is not conducive to a country's introduction of foreign capital. (2) It is conducive to encouraging foreign investors to cooperate with the investment of the host country, because adopting the limited principle can make foreign investors diversify their investment risks and protect the investors of the host country at the same time. Joint venture can enable the partners of the host country to learn the advanced technology and management experience of multinational companies, which is more easily accepted by developing countries because they need it. The principle of limited liability may sometimes unfairly protect creditors, but at this stage its role in economic life is still irreplaceable by other systems, and its advantages outweigh its disadvantages. (3) The principle of limited liability still has strong vitality in the company legal system. At present, countries generally implement the principle of national treatment for the protection of foreign investors, that is, multinational companies enjoy equal rights and obligations with investors in the host country in investment. In order to encourage foreign investors to invest, many developing countries even give foreign investors more preferential treatment than domestic investors. If a country implements limited liability for its own investors, but other stricter systems for multinational companies, such as requiring multinational companies to bear joint and several liabilities, it will inevitably hinder foreign investors from coming to invest. Therefore, the author believes that it is still an expedient measure to implement the principle of limited liability to the subsidiaries of multinational companies as a whole.
3.2 Details of "Unveiled Company"
At present, when countries use "unveiling the corporate veil" to deal with the debt problem of parent companies to subsidiaries, they are all based on the consideration of fairness and justice. Although China's "Company Law" does not stipulate the independent personality system of the company, we can completely abide by the basic principles of civil law such as honesty and credit, public order and good customs in practice, which are only applicable in certain circumstances. The author thinks that we should grasp the "specific situation" from the following aspects: (1) The parent company abuses the control right of the subsidiary, which leads to the superficiality of the subsidiary and lacks its own independent will and interests; In this case, the activities of the subsidiary completely replaced the parent company, and the parent company should bear the responsibility. (2) The capital of the subsidiary is insufficient, that is, the total assets of the subsidiary are obviously asymmetrical or disproportionate to its business nature and the risks implied; (3) The parent company manipulates the subsidiaries to conduct behaviors that are detrimental to the interests of the subsidiaries. If the multinational company has the above situation, once the debt of the subsidiary exceeds its own solvency, it will inevitably make its creditor's rights difficult to realize, and the parent company should bear joint and several liability for the debt of the subsidiary.
3.3 The legal application of the parent company's liability to its subsidiaries.
The domicile or registration place of the parent company and subsidiary company of a multinational company is often located in different countries or regions. Which country's law should be used to investigate the responsibility of the parent company? This is a controversial issue. This problem should be understood and solved from two aspects: one is to directly apply the laws of the host country to solve the independent personality problem of subsidiaries; Second, after the personality of the subsidiary is denied, the applicable law should be determined according to the principle of contract law application or tort law application for the debts incurred by the atomic company. [