Dormant Limited Liability Company Funded Legal Issues, Research,

For a long time, with the advanced development of market economic of China, there are many phenomenon of dormant investment in the Company field of our country. Moreover, many cases and dispute caused by dormant investment frequently take place, such as Shanghai Bailemen Co, Ltd vs. Shanghai Baocheng Real Estate Co, Ltd. However, the Company Law of P.R.C does not provide any specific regulation on the dormant investment, except the article 33 which is indirectly involved the problem. Meantime, the judicial practices on the case of dormant investment at the district court are different. And the difference is harmful for our country's rule of law. Therefore,The paper has a though study on the problem on dormant investment.This paper divides into 3 parts as Introduction, Text, and the Conclusion.The Introduction part introduce the background of this paper.The Text divides into 4 chapter as follows:Chapter 1 mainly introduces the basic theory on dormant investment, with the analyzing on the history, concept, feature, cause, and basic types.Chapter 2, continued from the preceding chapter, discusses the concept of dormant partner. And the author puts forwards the point that dormant partner is not just the same concept as dormant investor, but a concept which is more narrow than the latter. This chapter puts emphasis on the meaning of dormant partner, the different theoretical definitions on dormant partner, and the author's viewpoint on the definition.Chapter 3 discusses the arguments on the subject of identifying whether the dormant investor is entitled to be a shareholder of the company, which could be regarded as the subject of identifying whether the dormant partner is entitled to be a legal shareholder. Firstly, the author analysis 3 kinds of prevailed viewpoints on the subject of how to identify that the dormant partner is entitled to be a shareholder, with the discussing on the basic concept of shareholder, the principle of identifying, and the evidences of identifying. Then the author comments on the different judicial attitudes from the district court to the dormant partner with the Supreme Court "The Judicial Interpretation on the company disputes", and local regulations.Chapter 4 discusses two kinds of theories about how to deal with the legal relationships in dormant investment. Some scholars hold that undisclosed agency theory is the best way solving the problem about legal relationship in dormant investment. The other point of view is that trust law would be suitable for the problem. Therefore, the author lists the two theories, and analyzes their concept and features. Then the author analyzes the relationship between dormant investment and the agency, as well as the one that between dormant investment and the trust. Finally, the author points out that those two theories do not suitable for dormant investment, and it might be feasible to establish a company legal system to deal with the problem.The Conclusion part once again emphasizes the author's viewpoints.