The Research On Dormant Investment Of Company Of Limited Liability

The dormant investment toward the limited liability companies refersto the legal phenomenon that the actual investor’s name is not recordedin the relevant documents such as the articles of association, stockledger, and business registration. Accordingly, the dormant investorrefers to the natural persons, juridical persons and other economicorganizations that actually provide funds but are not recorded in therelevant documents. The scope of the dormant investor is wider than thatof the dormant shareholder. The dormant shareholders have the desire tobe shareholders of the companies, and exercise the shareholders’ rightsand perform the shareholders’ obligations. Of course, the dormantshareholders are different from the investors who become the shareholdersaccording to the company law, and the so-called rights and obligationsof dormant shareholders are not decided before they obtain the companyshareholder qualification according to the legal procedure.The two requirements as follows are necessary to obtain the companyshareholder qualification: the one is to actually provide funds or tosubscribe capital contribution; the other one is to record the investors’name in the relevant documents. Accordingly, the two requirements above correspond to the substantial evidence and formal evidence respectivelyfrom the perspective of evidence proving the obtainment of the companyshareholder qualification. The problem that how to confirm shareholderqualification is in essence the problem that which evidence can be usedto prove the shareholder qualification. In the course of confirmingshareholder qualification, the principle of “giving priority to theformal evidence and using the substantial evidence on rare occasions”should be observed. According to this principle, the company shareholderqualification should be conformed in the light of the formal evidence inmost cases, but when the substantial evidence is so sufficient that theformal evidence can be overthrew, the dormant investor can obtain theshareholder qualification through legal procedure. For example, under thesituation of the complete dormant investment, the substantial evidencecannot overthrow the formal evidence, so the court should confirm thatthe nominal investor can obtain the shareholder qualification; under thesituation of the incomplete dormant investment, if the dormant investorhas the evidence to prove that the company and other shareholders actuallyaccept its shareholder qualification, the dormant investor can use thesubstantial evidence to confirm the shareholder qualification throughlegal proceedings.The legal relationship caused by the dormant investment withagreement includes the internal legal relationship and the external legalrelationship, and the internal legal relationship is the base. Therelationship between the dormant investor and the nominal shareholder canbe regarded as the relationship between the dormant investor and thenominal shareholder can be regarded as the direct agency with theprincipal’s name disclosure, the indirect agency with the principal’sname nondisclosure and the indirect agency with the principal’sexistence nondisclosure. The two circumstances above can be regulated by the402nd and the403rd article of the Contracts Law. Therefore, on thebasis of the analysis of the internal legal relationship, the thesis putsforward solutions to some typical disputes caused by dormant investment.