Legal Issues Concerning The Criteria Of The Actual Controller Of Companies

"Company Law" has set up an internal control system for listed companies that uses the general meeting of shareholders as the center of power.Through the mechanism of the shareholders’ meeting,the controlling shareholder can make decisions on major issues of the company and control the company from a macro level.It can also select directors meeting their own requirements to enter the board of directors through the right to choose directors,thereby nominating directors and appointing senior management personnel to form a company.Operational level control.However,with the rapid development of society and economy,the form of control of listed companies has become increasingly complex and diversified.In fact,there have been pyramids,multiple holdings,cross-shareholdings,dual equity structures,and voting rights agreements that seek to control the company.The controlling shareholder is no longer the sole controlling entity of the company.The concept of the actual controller is thus formed.The emergence of actual controllers makes up for the gap between law and practice,but at the same time it also brings new problems.The system of actual controllers may become a tool for certain entities to use listed companies for private purposes.In order to effectively regulate the behavior of the actual controller,it is necessary to expose it to the “sunshine” of supervision.The first thing that must be addressed is the issue of legal identificationof the actual controller.The full text is divided into three parts:The first chapter first analyzes two concepts related to the actual controller,ie controlling shareholders and ultimate controllers,and believes that the scope of the actual controller covers the scope of the controlling shareholder;actual control People do not necessarily refer to ultimate controllers.Then,the article uses the definition of the actual controller in the “Company Law” as a classification criterion,and divides the actual controller’s control of the company into three categories: investment relations,agreements,and other arrangements other than investment and agreements.Explained.The second chapter is about the legislative and practical inspections that the actual controllers have identified.First of all,it examines the current rules for determining actual controllers in China.This section first shows the evolution of the concept of the actual controller in the legislation,and then enumerates the main factors determining the actual controller’s control rights.Finally,the requirements for disclosure level of the actual controller are introduced.At the practical level,it examines the self-identification of the actual controller by the listed company and the focus of the securities regulator’s determination on the actual controller.By sorting out and classifying the self-identification of listed companies for actual controllers,the article finds that the determination of the actual controllers of listed companies can be mainly divided into five categories.The first category is controlled shareholders and actual controllers,and the actual controller is the company’s holding company.The controlling shareholder of the shareholder;the second category is that the single natural person shareholder is recognized as the actual controller,the controlling shareholder and the actual controller are combined into one;the third category is the situation with the controlling shareholder but no actual controller;the fourth category is no The controlling shareholder has the actual controller;the fifth category is the case without the controlling shareholder and no actual controller.The securities regulatory authorities mainly pay attention to the three aspects of whether there are no actual controllers,joint actual controllers and control rights.The third chapter puts forward suggestions for improving the legal determination of the actual controller of listed companies.First,for the asserted person to control the company’s subjective intentions,the author believes that the principle of the problem is that it should proceed from the commercial appearance,in order to protect the trust interests of the company’s transaction counterparts,regardless of being identified,whether there is a subjective intention to control the company,as long as it has the ability to control the company objectively,it should consider whether to identify it as the company’s actual controller.However,the meaning of control still identifies the factors that need to be considered by the actual controller.If the listed company can prove that the identified person has no intention to control the company,it may consider not identifying it as the actual controller;at the objective certification level,comprehensive consideration shall be given.People control the capabilities of the company.In principle,the legal determination of the actual controller of a listed company should be based on the actual dominance of equity.If the equity actually controlled by the identified person accounts for more than 50% of the total equity,unless there is evidence to the contrary,it can be deemed as the actual controller of the company.The composition of the members of the board of directors of the listed company has a very close relationship with the company’s control rights.Whether it is the change of the company’s control rights or the existence of undisclosed concerted action relationships and equity entrustment agreements,the board members’ composition and The path of board member selection determines the actual controller behind the board.The final disclosure form recognized by the actual controller should be in the form of an equity structure chart to achieve the traceability of the company’s control rights.The first is the requirement for disclosure of the control hierarchy.Disclosure of the equity control relationship must be disclosed to the top-level natural person,state-owned assets management department,government and relevant government departments,workers’ shareholding platforms,village committees,collective enterprises,etc.;for the company’s top three Companies whose shareholdings of major shareholders are very close need to require them to disclose the actual controllers of the three major shareholders,and on this basis,determine theactual controllers of the company.