The Study On The Protection Of Rights Of Companies' Actual Investors

Currently,it is common that company actual investors usually invest through dummy shareholders who own equity in name only for the benefit of the actual investor.The Provisions of the Supreme People's Court on Certain Issues Concerning the Application of the “PRC Company Law”(III)also prescribes the rights and obligations and other matters between an actual investor and a dummy shareholder.It means that the double level system,i.e.,actual investors and dummy shareholders has been accepted and recognized by the PRC laws.However,with the development of economy,it is still a big challenge on how to deal with the disputes arise from this double level system.In this Article,I will first explain the meaning of company actual investors under the PRC laws,and try to categorize different types of actual investors.Secondly,I will further discuss whether company actual investors are entitled to the corresponding shareholders' rights,including confirmation of shareholder qualifications,right of information,right to request for profits distribution as well as right to participate in company operation and management.I will also discuss the limitation on dummy shareholders' rights.The second part will be discussed on the basis of different types of actual investors.Thirdly,from the perspective of comparative law,I will discuss how to effectively protect actual investors' rights under the PRC laws.Finally,I will try to provide some suggestions regarding the methodologies of actual investors' rights protection.Specifically,I will discuss whether it is feasible to notarize the contract between an actual investor and its dummy shareholder or by means of equity trust to protect actual investors' rights.