Research On The Dormant Investors’ Rights With The Shareholding Entrustment Agreements In Limited Companies

Under the condition of the market economic tidal wave, the investors who had suffered several ups and downs are getting to know more and more about the operation rules of the capital world. They have built up models which are full of highly competitive among the resources, benefits and risks and established many kinds of investment modes, including the dormant investment. The dormant investor transfer the share rights to the reliable person through the shareholding entrustment agreement so that he can avoid the investing restrictions and risks rationally and maximize the benefits by utilizing the current resources. The legality of the shareholding entrustment agreement was suspected in a very long time and the states of dormant investors as well as the benefits of investors could not be ensured. In 2011, the Explanation of Corporation Act, Item Three was passed. It had admitted the efficiency of shareholding entrustment agreement and made provisions of the investment responsibility of dormant investors and nominal shareholders. However, these rather simple rules could not resolve the issues of complex dormant investment. The disputes of shareholder qualification of dormant investors are still on processing, and the basic rights and obligations are not clear yet.In the aspect of shareholding entrustment agreement, this paper has judged the shareholder qualification of the dormant investors and probed the relation between the dormant investors and nominal shareholders on the basis of the effective agreement, and restricted the relation comparing to the fiduciary relation. On the basis of resolving the shareholder qualification and agreement nature, the paper would explore the rights of dormant investors in the aspect of contract law, trust law and company law and put forward some suggestions about the implement of rights of dormant investors.The paper is divided into three parts: introduction, body and conclusion. Chapter One is mainly introduced the causes of shareholding entrustment agreement, including avoiding the restriction of law and rules, enjoying the preferential laws and policies as well as the self-selection of the market subjects. It judges the efficiency of the agreement according to the cause and the content of the agreement, and explores the relation between the agreement efficiency and the shareholder qualification of dormant investors; on the basis of the agreement efficiency, Chapter Two talks about the relationship of dormant investors and nominal shareholders. It has introduced three kinds of the most representative theory, namely, the theory of consignor-agent relationship, the theory of trust relationship and the theory of dormant partnership. Meanwhile, it analyzes the disadvantages of these three theories and suggested to utilize the trust system to restrict and perfect the phenomenon of dormant investment; on the basis of two chapters above, the third chapter explores the rights of dormant investors in the perspective from the contract, trust and company and put forward some relative suggestions about the current system; Chapter Four is on the basis of Chapter Three. It observes the shareholding entrustment phenomenon through putting forward the improving way for the dormant investors to enforce the rights, and has an outlook to the laws and regulation of the dormant investment of the limited company in the future.