Research On The Legal Issues About Dormant Shareholder

With the development of the times,dormant investment as an economic phenomenon,has become popular in different law systems and regimes.Since the situation of shareholders is not known in the business activities under dormant investment,disputes over the ownership of equities tend to emerge.This category of disputes not only concerns identifying the qualification of dormant shareholders,but also the rights of dormant shareholders as well as other relevant issues on the transfer of equities.Currently there is no rule on the legal issues about dormant shareholders in Company Law of The People's Republic of China,while in Provisions of the Supreme People's Court on Several Issues Concerning the Application of Company Law,it only specifies the investment interests of actual investors,but does not acknowledge the status and qualification of dormant shareholders.Although there is agreement of dormant investment between dormant shareholders and significant shareholders,it does not entitle dormant shareholders to the qualification of shareholders.Real Right Law of the People's Republic of China is applied to handle the interest conflicts between the dormant shareholder and bona fides third party.In the condition that the equity handling of significant shareholders causes the loss of dormant shareholders,dormant shareholders can require significant shareholders to assume the responsibility of compensation.As for the issues such as the rights of dormant shareholders,their qualification of shareholders,the validity of contracts for the cases of transferring equities by dormant shareholders and significant shareholders,there is no clear rule in Provisions of the Supreme People's Court on Several Issues Concerning the Application of Company Law.The disputes from the transfer of equities by dormant shareholders emerge a lot in practice,thus the legal system concerned needs to be transformed.The thesis is composed of four sections.The first section contains two cases,involving the confirmation of dormant shareholders' qualification,rights of dormant shareholders,agreement of dormant investment and the confirmation on the validity of contract for the transfer of equities by dormant shareholders;the second section is the general introduction of dormant shareholders,including the characteristics of the definition of dormant shareholders and the relevant provisions on the legal issues of dormant shareholders(and the provisions' drawbacks);the third section analyzes the legal issues on dormant shareholders in the two cases,specifically the controversial issues raised from the cases in the second section,including the issues on the confirmation of dormant shareholders' qualification,the legal relationship between the dormant and significant shareholders,the rights of dormant shareholders and the transfer of equities by dormant shareholders;the forth section recommends on the transformation on the relevant law of dormant shareholders based on the highlight of key controversial issues.The recommendations made(including confirming the qualification and rights of dormant shareholders,completing the equity registration system and building the equity trust system)refer to the international law concerned.