Study On The Cognizance Of Dormant Shareholder’s Qualification

Along with development of Chinese market economy, more and more people choose to invest shareholder’s rights with the money in their hands. And the diversity of investment subject promotes the diversification of investment way. Dormant investment receives much approval from many investors as a new investment way. However, because the dormant shareholders are not clearly defined in the Chinese law system, especially the cognizance of dormant shareholder’s qualification, as the fundament for the dormant shareholder’s, courts always enter contradictive judgments on the resemble character dormant shareholders case. On the other side, theoretical circle has so many arguments on the cognizance of dormant shareholder’s qualification, lacking of technicality and systematicness research, cannot provide strongly theoretical assistance to judicial practice. But the Mechanism of Equity Interest Separation discusses the influence of personal interest and property interest on the cognizance of dormant shareholder’s qualification theoretically. It has plenty of kindred points with the Trust system. Therefore,it may be a new rational theoretical approach to figure out the cognizance of dormant shareholder’s qualification problem for us.Many scholars give different definitions to dormant shareholder. But, having the actual capital contribution and names are not registered in the company’s articles of association, register of shareholders, industrial and commercial registrations are agreed with all. Thus, it are all the characters of dormant shareholder’s that covered and limited capital contribution, the finite risk of losses and complicated dispute, usually happened in the limited liability company, contracts between the nominal investor relations. Meanwhile, the causations of dormant shareholder come from legislation, society and economy. In consideration of different causations of dormant shareholders, it can be divided into variety categories: implicit dormant shareholder and explicit dormant shareholder; agreement dormant shareholders and disagreement dormant shareholders; totalled dormant shareholders and untotalled dormant shareholders; part of the dormant shareholders and all the dormant shareholders.There are plenty of law and regulations and results of research governing the cognizance of dormant shareholder’s qualification problem all over the world. The Trust system of Anglo American law system solves the cognizance of dormant shareholder’s qualification problem successfully, while Continental law system has many imperfections about it. Company law judicial interpretation(III) tries to reverse the situation of the cognizance of dormant shareholder’s qualification, but receives less effect. Meanwhile, there are three theories in the theoretical circle: real element theory, formal element theory, discrimination theory, which all cannot give strong theoretical support to judicial practice.The Mechanism of Equity Interest Separation determines to separate the personal interest from property interest in equity interest. Dormant capital contribution may be considered as reserving the property interest of equity interest, and giving up the personal interest to nominal shareholder. Make it get the personal interest, while the property interest is preserved by dormant shareholder. The mechanism has so many similitude aspects with the Trust system of Anglo American law system on operating the cognizance of dormant shareholder’s qualification, that it possibly become a novelty approach to resolve the issue of the cognizance of dormant shareholder’s qualification.Nonetheless, no matter what theory we depend on to cognize the qualification of dormant shareholder, protecting public and transaction safety, respecting will freedom and indenture freedom, balancing interest and maintaining stability of the company, forbidding against the law viciously are the principles must be complied, otherwise, the effect of legislation will be damaged. Under the guidance of hereinbefore, ascertain the basic way for cognizance of dormant shareholder qualification: comply the formal element first, the real element shall be the supplement. Then we can explain the details for specific manners of cognizing dormant shareholder qualification.