Legal Thinking Of The Status And Interest Of Registered Shareholders Under Dormant Investment Condition

Dormant investment derived from the company’s practice is a particular form of company investment, which makes the company’s financing become relatively flexible but also makes the company’s internal and external relationships become blurred and even chaos, causing a lot of disputes. Because there is no clear specification about dormant investment from China’s current legislation, so understanding it of the theory and judicial practice rises controversial. Academics and judicial practice usually focuses more on the qualification and rights protection issues of dormant investors when faced with the problem of dormant investment but ignores the legal status and rights protection of registered shareholders, leading to a tilt "balances". Therefore, both the legal issues of dormant investors and registered shareholders should be investigated to resolve dormant investment disputes, make the right and interest of both sides equitable and maintain market orderly and stable. The full text is mainly composed of four parts.The first part is to ask questions. The trial conclusion on equity dispute instance was completely converse of Cong yuan company through first and second time. There were three issues on equity dispute instance of Cong yuan company:recognition criteria of qualification as a shareholder, whether dormant shareholders had the right to request the return of investment funds and whether registered shareholders took responsibility in law. The thinking could be drawn forth from this instance that the relevant legal issues of both the dormant shareholders and registered shareholders should to be explored under dormant investment condition.The second part is about the research for the phenomenon of dormant investment and their legal plight. There are broad and narrow concepts for dormant investment while this paper adoptes the narrow one. Dormant investment can be divided into two cases in our company practice that one is aimed to circumvent the law while the another is not. The law dilemma triggered by dormant investment mainly includes Shareholders’ qualifications and the right to clear stake, the dispute of defect funding, the equity transfer and the demand to return the investment funds.The third part is focused on the jurisprudence and empirical evidence analysis of the legal status of registered shareholders. There are three main explanations about the legal status of registered shareholders in company law theory:the theory of essence,the theory of modalityand the theory of compromise, among which the theory of compromise is more appropriate. Both the "PRC Company Law" judicial interpretation (three) and part guidance documents from the Supreme People’s Court of some districts suggest that different attitudes should be held to the legal status of registered shareholders, when the theory of essence is taken for the internal (between registered shareholders and dormant shareholders) while the theory of modality is taken for the foreign (between shareholders and third transaction parties).The fourth part is about the research for the consideration of right and interest and judicial remedies of registered shareholders. The right and interest of registered shareholders should be given consideration and protection under dormant investment condition. The interests of registered shareholders mainly include beneficial rights and procedural rights. Different remedies should be given to registered shareholders according to the different contents of the dispute.