On Cognizance Of Dormant Shareholder’s Qualification

Nowadays, with the tremendous development of Chinese market economy, largeamount of dormant shareholders surge in economic fields. This phenomenon thereforecauses various disputes regarding dormant shareholders. In legal practice circle, thereis no relevant law and regulations governing these legal relationships. And as for thecognizance of dormant shareholder’s qualification, trial thinking and standards differsfrom judge to judge and court to court. Thus, courts always enter contradictivejudgments on there disputes, and couldn’t provide sufficient protection for the parties.Meanwhile, in theoretical circle, researches on the cognizance of dormantshareholder’s qualification lack in technicality and systematicness, and differentopinions can reach a unique theory. There provides no practical meaning for copingthis kind of dispute. Consequently, this thesis focuses on the cognizance of dormantshareholder’s qualification and does a special and systematical research on this issue.This thesis consists of four parts as following:The first chapter gives a brief introduction of dormant shareholder. First of all, thischapter makes a definition of the dormant shareholder. Based on several opinionswhich are prevailing in present theoretical circle, it concludes their commoncharacters and then analyzes the personality of dormant shareholder. Through thisdefinition, the legal characteristics of dormant shareholder are demonstrated. Second,this chapter also analyzes the causations of dormant shareholder. Most dormantshareholders invest in company with the purpose of evading compulsory law and regulations, or unwilling to expose their name due to business consideration andpersonal situation. At the same time, it discusses the typical classification of dormantshareholders.The second chapter analyzes a true typical case, and remarks on the judgments bythe courts of first and second instance. Then it puts forward a controversial issuewhich is frequently discussed in both practical and theoretical circle. That is whether adormant investor is eligible for a shareholder and what are the standards. Then thischapter describes the three theories on the cognizance of dormant shareholderqualification. The last part of this chapter does some comparative legal research onthe cognizance, and studies relevant regulations and interpretations currently in effectin our country.The third chapter demonstrates the basic principles and elements of cognizingdormant shareholder qualification, which lay a foundation for the followingdiscussion. Firstly, this chapter expound on the basic principles and concepts withwhich must be complies on the cognizance of dormant shareholder’s qualification.These are: protecting transaction safety, respecting freedom, promoting swift trading,balancing interest and maintaining stability of the company. Secondly, this chapterdiscusses different opinions on the cognizance of dormant shareholder’s qualification.The fourth chapter explores the specific cognizance of dormant shareholderqualification and establishes a theoretical basis for judicial practice. In the beginningof this chapter, the author comes up with the basic way for cognizance of dormantshareholder qualification: the cognizance shall follow the principle of applying theformal elements in preference to the real elements and applying the real elements inseparate situations. And then this chapter details the specific ways of cognizingdormant shareholder qualification.