Research On The Legal Issues Of Equity Entrustment

Since the reform and opening up,our market economy has developed rapidly,and the number of enterprises established is increasing day by day.At the same time,equity holding,which originated from the West,has been widely used in Chinese trading market.Proxy holding is conducive to increasing shareholders’ investment in the company and promoting economic development.Due to the inconsistency between the actual investor and the shareholder registered with the registration authority,disputes often occur between the actual investor and the shareholder agent.However,the Chinese law has not made detailed provisions on the stock agent holding,and the relevant judicial interpretation has not provided any rules or explanations on the key issues such as the nature of the stock agent holding,the confirmation of the shareholder qualification and the ownership of the stock.As a result,judges tend to make discretionary decisions according to their own understanding of the law when dealing with disputes over ownership of shares.As a result,the judgment standards are inconsistent,resulting in inconsistent results and different judgments in the same case.For the above problems,we should take corresponding measures in time to explore ways to solve the disputes over entrustment of equity rights.Based on the above background,this paper intends to discuss several legal issues of equity entrusting.Equity entrustment involves complicated and diverse legal relations,which are characterized by strong secrecy,separation of property and personal nature of the subject matter,and uncertainty of the result.The author thinks that there are several possible reasons for equity entrustment: In order to avoid restrictions on the number of shareholders or promoters,avoid restrictions on the identity of the subject,use the identity of others to enjoy preferential policies,protect personal privacy,based on the legal relationship between the alienation and the guarantee,etc.Secondly,it summarizes the current situation and existing problems of equity entrustment.This paper summarizes the legislative situation of share proxy,and finds out that different judicial results of the same kind of problems often occur in share proxy disputes by referring to typical cases of share proxy in our judicial practice.After careful analysis and comparative study of selected cases,it is found that the main problems of equity entrustment in China are: unclear effectiveness of equity entrustment and disputes over shareholder qualification standards and ownership.In order to solve the problem of determining the validity of equity entrustment,it is necessary to clarify the nature of equity entrustment.The academic circle has not reached a unified view on the nature of equity entrustment,and there are four academic viewpoints: entrustment,trust,partnership and agency.This paper agrees with the theory of fiduciary relationship.On the basis of clearly defining the nature of entrustment,it is necessary to judge the validity of the entrustment agreement correctly according to the conditions for determining the validity of the entrustment agreement.When hearing disputes over entrustment,the judicial organs should not only fully respect the autonomy of the parties,but also strengthen the application of the principle of public order and good custom.On the issue of shareholder qualification,there are three viewpoints in the academic circle:substantive theory,formal theory and differentiation theory.This paper holds that the compromise theory should be taken as the qualification criterion of shareholders,the management system of shareholders’ register should be perfected,the procedures of actual investors’ naming should be perfected,and the principle of interest balance and fairness should be taken as the principle of equity ownership after the agreement is invalid.The legal consequences of the termination of equity enfranchisement should be determined according to the two choices of nominal shareholders.