Dormant Investment Company Legal Issues

The dormant nature of the investor sand the complicity of the investment relationship have caused certain difficulties in correctly resolving disputes of this type. In the reality life more and more legal disputes arising out of dormant investment have occurred. Since the laws of our country do not contain express and direct stipulations on dormant investment, in judicial practice different attitudes have been adopted in dealing with cases in this field, and such different attitudes have caused great confusions.This article have five parts.The first part defines the scope of dormant investment and points out that the connotation of dormant investment is a means of investment where the actual investors differ from the apparent shareholders of the invested companies and that dormant investment does not constitute a new type of commercial entity. The second part analyzes the types of dormant investment and the cause of its emergence. The third part analyzes the relationship between the various parties involved in the dormant investment(including the relationship between the dormant investors and the apparent shareholders, the relationship between the dormant investor sand the companies and the relationship between the dormant investor sand third parties),and the forth part tries to study the specific legal issues involved in dormant investment and their solutions. Finally, this article raises some considerations as to enact special legislation to regulate dormant investment and how to regulate taking into account of the specific circumstances with hope that this can be of certain contribution to the resolution of disputes relating to dormant investment encountered in our judicial practice.