Study On The Legal Issue Of Dormant Investment

As the market economy develops deeply, there are more and more dormant investments in economic field. Although the dormant investment can bring abundant income and promote the economical growth, it also has much negative influence. There are huge security hidden dangers. Not only dormant investor's benefit but also the third party's interests shall be destroyed. The dormant investment is easy to create confusion of legal relationship. It has disadvantageous to maintain economic order and to safeguard transaction security, so the dormant investment is a legal issue that should be solved urgently. But there is incisive contradiction between the realistic need and legal blank. There are no stipulations of dormant investment in present laws and regulations of our country. The judges mainly base on the civil and commercial law to solve these problems. Although there are some stipulations which are refer to this problem in some standard documents, which is made by judicial organ such as the Supreme People's Court or the Higher People's Court of Shanghai. They are just some standard documents, so they don't have legal effect. The judicial organ can use them as reference to solve the problem. In the judicial practice, this kind of problem often rise, that different judges make the opposite decision for one kind of problem of dormant investment.This article mainly discusses four kinds of typical problems, for example, shareholder qualification confirmation, assignment of shareholder's right, the problem that dormant investors don't invest full funds and the issue that dormant investors request to return the investment funds. By comparing different theories and weighing the advantageous and disadvantageous, I find out the best solution. Then by analyzing present situation of legislation of our country and abroad, I propose some suggestions for legislation of dormant investment. I design some safeguard measures to reduce the risks and to maintain transaction security.There are three chapters in this article. First chapter introduces the dormant investment. I introduce the legal conception and analyze the characteristic, reason and type of the dormant investment, then I compare dormant investor with other shareholders who are unworthy of their names, for clarify the conception.Second chapter mainly discusses the legal problems refer to dormant investment and relevant processing opinions. Because the legal relationship is complex and there are many two investors in dormant investment, I divide these legal problems into three kinds. First kind is the legal relationship between the dormant investor and the shareholder who reveal his name. This kind of legal relationship is easy to deal. It can be settled according to the stipulations of the contract law, right infringement law and unjust enrichment law. Second kind is the legal relationship between the dormant investor, shareholders and the company. The most important problem in this relationship is the shareholder qualification confirmation. By comparing the essence theory and the form theory, I make a conclusion that the principle is that we should confirm the shareholder who reveals his name as shareholder of the company, the exception is that confirm the dormant investor as shareholder of the company. In the third kind, I discuss three typical problems, which are assignment of shareholder's right, the problem that dormant investors don't invest full funds and the issue that dormant investors request to return the investment funds. We settle these problems on the bases of protection of the third party on good faith.The third chapter discusses the perfect measure of dormant investment. By analyzing the necessity and feasibility of legislation, I make conclusion that the legislature should formulate stipulations of dormant investment in company law, in order to make up the legal blank. Considered the investment risk and transaction security, the dormant investors should make detail contract, preserve the proof of investment properly and strengthen the supervision of the shareholder who reveal his name in management of company.