Research On The Legal Issue Of Nominal Shareholders

With the constant development of China’s market economy, the shareholders inthe company’s operating process has played an increasingly important role. Current"Company Law" has certain deficiencies in the provisions of the qualification as ashareholder, during the development, some "special shareholder" different fromclearly defined shareholders come out, including the dormant shareholders, nominalshareholders, false shareholders. Moreover, in recent years, nominal shareholderphenomenon has been increased, which generated a lot of practical problems injudicial practice. As the name suggests, the nominal shareholder is registered in theregister of shareholders in the company, recorded in the articles of association andthe business registration and other formal requirements, but it does not actuallyinvest. The reason of the nominal shareholders, not only for legal reasons, there arealso personal reasons."Company Law" has not identified clear standards forqualification as a shareholder, is the root cause of this problem, and economicinterests are often the main cause of the induced nominal shareholder disputes. Asthe nominal shareholders become shareholders in the form of elements, but theactual investors to become shareholders of the substantial elements. When thecompany have profitability, the nominal shareholders and investors have advocatedto confirm the identity of its own shareholders.when the company into debt, mutualshirk, different opinions are advocated to deny the identity of its own shareholders.Different courts on the handling of such cases according to different criteria, oreven opposed to each other. Although the Supreme People’s Court on the applicationof the People’s Republic of China Company Law provisions of (c) specifies theprovisions in the form of dispute resolution in the nominal shareholders andinvestors. However, the nominal shareholders, increasingly complex, more and more involved in the main, the controversy still continues on the nominal shareholderissues. Theoretical circles for nominal shareholders’ qualifications identified holdersof two kinds of representation of the view that substantial elements and the formalelements. The two views have advantages and disadvantages in dealing withpractical problems, they should be taken into account not only one. So, either intheory or in practice, there is a pressing need to improve the legislation of nominalshareholders.Nominal shareholders as a subject to participate in market economy, it shouldenjoy the corresponding rights and fulfill certain obligations. Nominal shareholderdifferent from shareholders under the Companies Act, it has a certain degree ofparticularity. I believe that the nominal shareholders enjoyed some rights, such asvoluntarily choose whether to sign the agreement, a request to confirm the eligibilityof shareholders, return on assets,require the actual contribution of people to fulfilltheir obligations, right to know and disclosure the identity of the actual investor. Thesame time, the nominal shareholders should fulfill to comply with the agreement, theobligation to maintain the actual investor interests and the interests of the company,and also should comply with fiduciary duty.All research on nominal shareholders in order to solve practical problems in thefinal analysis, that is the division of responsibilities. The main division ofresponsibilities with the nominal shareholder disputes the actual investors, othershareholders, creditors, these three categories. The author believes that we shouldadopt the principle of "differentiated", when determining of responsibility. Disputesof the nominal shareholders and investors with substantial elements should beaccording to substantial elements treatment. However, the responsibility of thenominal shareholders and other subjects identified with formal requirements. In thisway, it will be useful of solving the problem of identification nominal shareholderresponsibility.Therefore, I start from the concept of nominal shareholders, legal characteristicsand causes of nominal shareholders.There is a distinction between the two views. Then the article analysis of the legislative defects of the existing Company Law ", inorder to explore the titular shareholders principles and standards ofqualification.And the last part is division of responsibilities to look forward to playsome reference to the improvement of legislation, to guide judicial practice.