Legal Status Of A Limited Liability Company The Actual Investor

It is a widespread phenomenon in practice that investors borrowedother’s name to invest to the company, because of the current lack ofregulation on the undisclosed investment law relationship, undisclosedinvestment disputes exist in many cases. The "Supreme People’s Court onthe application of<PRC Company Law>Provisions on Several Issues(c)(hereinafter referred to "Explain Ⅲ" made the corresponding regulationsto this problem. Explain Ⅲ actually provides beneficial solutions forpractical problems, but the concepts and content of the actual investor isstill not clear, the actual investor qualification standards are still lacking,fundamental problem remains to be solved. It is concluded that it is areasonable way to apply the representation system which is applied inBritish and USA, the specific regulation about the agent in China’s "Contract Law " and the related theory in company law to solve the legalstatus of actual investor.Chapter one is the basic theory of actual investor. First, define thedormant investors, the paper argues that theorists called the undisclosedinvestors “anonymous shareholders”, but based on the existing laws,undisclosed investors should be defined as “actual investor”. Secondelaborate the main features of the actual investor. Again, depending onthe actual contribution intention, the legal relationship between it andnominal shareholders shall apply different legal norms. Finally, paperintroduces norms and doctrines of the actual investor in otherjurisdictions.Chapter two describes the reality state of the actual investor. Intheoretical circles, to solve the main problem for the legal status of theactual investor, there are formal theory substantial theory，all-roundtheory and so on, but these three theories all have some defects. After this,the article is mainly on the detailed interpretation of the "Companies Lawexplained" and analysis of the deficiencies of the judicial interpretation.Chapter three is the actual investor legal practice analysis. Firstidentify the agreement between actual investor and the nominalshareholder which is the premise of actual contributor shareholder qualification. Secondly, the paper argues that the actual investorconnotation essentially fit with the agency system, the form of theirdisputes is the same form of legal relations as undisclosed agent in theAnglo-American agency system, adjustment agent Undisclosed agent.Therefore, according to our current situation, modeled agent system to thecommon law system, while combined with our existing agency theorycan be adjusted on the legal relationship of the actual investor, nominalshareholders, other shareholders of the company and third party outsidethe company. Finally, if the actual investor takes fully hidden control ofthe company management, there is bound to abuse of shareholders’ rights.It will damage the interest of the company, the interests of othershareholders and creditors of the company, so the paper argues that, theCompany Denial System should be applied to the actual investor.