On The Legal Regulation Of Dormant Shareholders

Dormant shareholders refer to investors who actually contribute to the company while leaving the company's articles of association, register of shareholders and other business registration materials bearing other people's name in accordance with a contract. Since dormant investment is a world-wide phenomenon, the legal regulation of dormant shareholders is of great significance in terms of the protection of individual autonomy, prevention of rights infringement as well as stability and development of the society. The necessity of legal regulation is extremely obvious given the mounting cases and confusion derivative from dormant shareholders.Currently, although practitioners have made Continuous exploration on the legal regulation of dormant shareholders in China, we still do not regulate this issue by means of national legislation. It is under such circumstance that the Supreme Court promulgated the "Interpretation of Company Law III ", in pursuit of regulation of the above question. However, the legal effect of judicial interpretation has been controversial, not to mention the defects of the "Interpretation of Company Law III ".In respect of such a severe situation, this paper conducts a research on the necessity of the legal regulation of dormant shareholders from a practical and academic point of view. I am convinced that we should integrate limited protection principle and social benefits principle into the whole process of the legislation, paying due attention to the dormant investment contract and the qualification of dormant shareholders. On the one hand, the legislation should show full respect to the dormant shareholder contract subjected to the mandatory provisions of law and protect the contractual rights effectively; on the other hand, the legislation should not recognize dormant shareholders as shareholders in case that the autonomy of dormant shareholders intervene a third party. Meanwhile, the legislation is supposed to pave the way for dormant shareholders to give up the interest derived from the status of dormancy and the opportunity to get in line with eligible shareholders.Based on the above arguments, this paper focuses on the dormant investment contract, the registration of dormant shareholders and the transfer of equities, putting forward the proposals to construct the future regulation system in hope of providing some reference to the legislation of dormant shareholders.This paper is divided into three parts, that is, introduction, body and conclusion.The introduction elaborates the research background, current research status as well as ideas and methods this paper adopts.The body is composed of three chapters, discussing related theoretical questions of dormant shareholders regulation, the necessity of legal regulation and the institutions of the regulation of dormant shareholders respectively.ChapterⅠ: An overview of dormant shareholders. This chapter crystallizes the concept of dormant shareholders by way of comparison of different concepts, analyses the reasons for the appearance of dormant shareholders, and reorganizes the development and regulations of dormant shareholders at home and abroad.ChapterⅡ: Necessity of the regulation of dormant shareholders. Based on the analysis of theories and practice, this chapter discusses the needs to regulate dormant shareholders through legislation from the perspective of individual, society and legal practice.ChapterⅢ: Regulatory system of dormant shareholders. This chapter discusses the key institutions of the regulation, advancing legislative proposals concerning the issue of regulating dormant shareholders on the ground of doctrine comparison and interest analysis.The conclusion is a summary of the paper and legislative proposals.