The Limited Liability Company Of Dormant Investment Identity And Rights Protection

With the successful completion of the “12th Five-Year”plan,the economy of China has developed rapidly. There are various forms of investment and different investors.One of the forms is dormant investment.As the new capital injection will help increase the viability of the market and ability to withstand risks,Chinese judicial interpretation issued in 2011 has admitted dormant investment and furthermore try to find a balance point between the company,the nominal shareholder and the actual investor to encourage trade,safeguard the interests of all parties,ensure the security of transaction.Even though the judicial interpretation of the Company Law has affirmed the dormant investment, it doesn’t elaborate the status of the dormant investors and the protection of the rights,leading to chaos of the trial which is not conducive to judicial justice.The value of the law lies in freedom,justice and order;the function of the law lies in guidance,evaluation,prediction,enforcement and education.Only when the legislative is clear can the law realize its value. This paper attempt to expand discussion with three parts from the angle of identity of the dormant investor and protection of all parties in this legal relationship.In the first part,this paper try to analysis the concept and the features of the dormant investment and make a distinction between the dormant investment and related concepts.The author’s point of view is that although the dormant investment has some similar features with other commercial legal relations,it has its own features such as nominal concealment and the authenticity of capital contribution.Compared with partnership,agency for an unnamed principal,debt, false shareholder and trust, the concept of dormant investment will be more clear and definite.In the second part, this paper try to discuss the identification of the dormant investor from the angle of how to obtain the qualifications of the shareholders.On the basis of Essence Theory,Form Theory and Eclectic Theory,the author sum up an analysis method that is taking the internal apart from the external,using two cases to prove its rationality.In the case of dormant investment,any subject has the potential to become the weak party in the relationship,and the legitimate interests of any party shouldn’t be abandoned.Therefore,the third part,which is based on the second part,is focusing on the protection of rights and interests of actual contributors,nominal shareholders and bona fide third party.