Study On The Legal Issues On The Dormant Shareholders Of A Imited Liability Company In China

The group of dormant shareholders is growing rapidly, more and more The legal disputes involved become complex and diverse. However, due to the lack of legislation on dormant shareholders, the courts make judgments in accordance with their respective guidance. It results in different verdicts in different courts, and the verdicts not only fail to protect the legitimate rights and interests of dormant shareholders, but also seriously harm the authority of the court. Faced with such a situation, in February2011, the Supreme Court promulgated and implemented "The Third Explanation of the Provisions on Several Issues of the Company Law of the People’s Republic of China" to regulate the system of dormant shareholders and expect to solve the above problems. However, the judicial interpretation of the provisions of dormant shareholders is not specific or systematic, and there are some gaps and omissions, so it can not solve the problems in dormant shareholders. This article studies the basic theory of dormant shareholders, the identification of dormant shareholders and the legal disputes on dormant shareholders and other legal issues to establish the system of dormant shareholder by legislation.This article is divided into three parts of the introduction, the body and the conclusion.The introduction is about the writing background of this article.The body part has four chapters.The first chapter introduces the basic theory of dormant shareholders. Mainly from five aspects of the concept of dormant shareholders, the characteristics of dormant shareholders, the classification of dormant shareholders, the comparison of dormant shareholders and the related concepts, and the reason why dormant shareholders exist, the article analyzes the dormant shareholders to have more profound understanding of dormant shareholders.The second chapter elaborates the qualification of dormant shareholders, and mainly analyzes the qualification standards from the point of view of theory and practice. Firstly, it put forward the required principles of law for the qualification of dormant shareholder. Secondly, from the theoretical aspects, it analyzes three theories for the qualification of dormant shareholders which are affirmation theory, negation theory and neutral viewpoint. The article analyzes and compares these three theories and put forward my own point of view. Finally, from the point of view of the judicial practice, the article analyzes the different ways to handle the qualification of dormant shareholders before and after the implementation of Third Explanation of the Company Law. This paper analyzes the representative Shanghai Court and Jiangsu Court, and the qualification of dormant shareholders according to the Third Explanation of the Company Law, and puts forward my point of view.The third chapter makes classification and assessment for disputes and the processing of the dormant shareholders. By analyzing the disputes and the processing of the dormant shareholders, we can have more comprehensive understanding of the problems of dormant shareholders. Firstly, according to different subjects, the disputes arising from the dormant shareholders are divided into three categories. The first category includes the disputes between the dormant shareholders and the dummy shareholders. The second category includes the disputes between the dormant shareholders and the other shareholders in the company. The third category includes the disputes between the dormant shareholders and the third party. And then, we have analyzed and discussed the representative disputes in each category, and the processing approach.The fourth chapter focuses on the current legislation of dormant shareholders and the need for legislation, and specific legislative proposals. Analyzing the current legislation of dormant shareholders, we drawn a conclusion that the legislation of dormant shareholders is in a blank state. Although the Third Explanation of the Company Law has made provisions on the issues of dormant shareholders, there are some problems in the provisions, which mean they are not comprehensive and complete. And then in combination with the current legislation vacancy, we discuss the current need for legislation of dormant shareholders. Finally, based on the elaboration of the above three chapters, the article makes some specific proposals on the legislation of dormant shareholders, including proposing to add some special chapters in the Company Law to regulate the problems of dormant shareholders and the involved specific content.The last part is the conclusion to reiterate the point of this article, in particular, briefly outlines the standards of the dormant shareholders and the legislative proposals and clears the point of the article.