Analysis On Validity In Terms Of Share Transfer Under Anonymous Investment

As an investment behavior in commercial affairs, anonymous investment has been ratified by Provisions of the Supreme People's Court on Certain Issues Concerning the Application of the "Company Law of the People's Republic of China"(III)(Hereinafter referred to as Judicial Interpretation III of the Company Law). It gains popularity among some investors due to its flexibility, convenience, and innovativeness which also cause tremendous dispute. Share transfer itself has complexity with its involvement of companies, shareholders, both parties of transfer, and third party beneficiary. Moreover, actual contributors complicate civil legal relationships regarding this issue. Existing theories of share transfer under anonymous investment are scattered and immature, which also lacks consistency in judicial appraisal process. This thesis is established in available theories, combines with judicial practice, and hopefully clarifies the issue on validity in terms of share transfer performed by nominal shareholders and actual contributors.This essay consists of four parts. Part One analyzes legal structure of share transfer under anonymous investment. Using three-side principle of assignment as a starting point, it straightens relationships regarding anonymous investment under share transfer assignment. Also it introduces theories of share rights and shareholder qualification from perspective of dichotomy of transfer objects. Furthermore, it demonstrates differences between share transfer under anonymous investment and common share transfer. Part Two tackles with theoretical puzzles regarding share transfer under anonymous investment, which include academic dispute among shareholder qualification acquirement, object of assignment, effect of assignment contract, and performance of contract which contains time point of share rights alteration, application of bona fide acquisition, and share transfer validity under a breach of restrictive conditions of external share transfer. Part Three is empirical analysis. Through analyzing and summarizing 49 documents on share transfer dispute under anonymous investment which are collected from China Judgments Online(http://wenshu.court.gov.cn/) it presents judges' stands and concerns when proceeding similar cases. Thus it is the practice of theories discussed in Part Two. Part Four provides legislative and judicial suggestions which can solve similar cases mentioned above. Legislative suggestions contain: synchronize time point of share rights alteration with time point of shareholders' alteration; ensure reversibility of share transfer when it involves a breach of restrictive conditions of external share transfer. Judicial suggestions contain: on shareholder qualification issue, set nominal shareholder entitled with qualification as a principle, and set actual contributor entitle with qualification as an exception; discuss separately on validity in terms of external transfer of nominal shareholder and actual contributor; acknowledge its validity in terms of external transfer when a nominal shareholder holds qualification, or apply bona fide acquisition system when a nominal shareholder loses qualification and still acknowledge its validity of external transfer; nevertheless, when bona fide acquisition collides with right of preemption, guarantee the party who are entitled right of preemption with reversibility; adjust their relationship in light of Company Law when an actual contributor performs external transfer and the assignee refuses to reveal name; however, when the assignee requires revealing, the actual contributor shall execute name revealing process and apply restrictive conditions of external share transfer before its validity of share transfer can be acknowledged.