Analysis On Rights And Obligations Of Limited Company's Concealed Investors

The concealed investment is a special type of investment which not only satisfies the purpose of a market entity to take part into investment and financially benefit from that,but also promotes the economic growth and prospers the market thereby. However, this type of investment has certain negative effects on the trade safety and the stability of social relationship due to its conflicts with the rules of the current Company Law governing the record and registration of the shareholders'. Disputes concerning concealed investment, though often seen in the practice of Company Law, are even more difficult to be resolved owing to the lack of legislation and inconsistency of judicature. The instant writer will start from analyzing juridical embarrassments and typical dispositions of this kind of disputes; then put forward to propose some rules to limit the fights and obligations of concealed investors, and by doing so, provide constructive suggestions for the legislation relating concealed investors' rights and obligations.. The instant essay is divided into four parts as follows:The first part is to analyze the concept, characteristic profile and causes of generation of the concealed investment. In the style of concealed investment, persons who practically make the investment and enjoy the financial benefit are called "concealed investors." However, other investors who have been publicly stated by the investment company are "named shareholders." Reasons why the concealed investment was generated are multiple: 1) The government makes the macroscopic adjustment; 2) The investors seek wealth subjectively; and 3) there are some factors in legislation. The author presents the complete and deepened analysis on the causes of generation of concealed investment, in order to help control the generation of concealed investment from the source efficiently without only making the jurisdiction treat with this investment passively.The second part is to discuss the controversies in juridical practice and the typological analysis of disputes in relation to the rights and obligations of concealed investors. The complication of relative legal relationships and legal problems as well as the lack of definite legislative provisions put the judges in a situation that is too confusing to make a decision. The writer typologically demonstrates the complexity of concealed-investment related cases through citing authorities and the cases whose results of the first instance and the appeal are in contradiction and thereby, brings forward suggestions of resolving those cases on the basis of analysis.The third part is to make an systemic analysis of concealed investor's rights and obligations. The concealed investment is seen so spaciously that only relying on the current laws hardly meets the requirements of practically regulating the investment.Whether it prohibits or settles this investment, the laws must clearly show the answer.The civil entity enjoys the rights and takes the obligations on the civil behaviors it has made, not only depending on its own desires, but also making these desires conform to the legal stipulations. Hence, limiting the rights and obligations of concealed investors sees a basic precondition as follows: The force and effect of behaviors of concealed investment ought to be clarified. The current laws and regulations have not seen a clear stipulation on both the force adeffect and the rights and regulations of concealed investors.However, the jurisdictional practices and the related regulations of newly modified Company Law have recognized the force adeffect of concealed investment with conditions in trend.The fourth part is to have a consideration on the legislation of rights and regulations of concealed investors. The legal relationships in which the concealed investment is involved are very complicated. To efficiently settle down the regulatory system of rights and regulations of concealed investors, we can take the basic measures of dividing different legal relationships and regulating varied rights and obligations. For constituting the Chinese legislation system of concealed investment, we ought to follow the value orientations of "contract self-government," "third person of protecting transaction" and "encouragement of investment innovation." In the concrete legislation, we can import the "contract-relationship expansion theory,", give the third person a selection right and perfect the responsibility-shouldered system of concealed investor.