How To Identify De Facto Controller:Constitutive Requirements,Filtrate,and Special Form

The birth of the de facto controller of our company originates from the need of practice,it's essential to regulate the legal consequences of those who control the company and is behind the scenes because of the reality that the corporate governance in our country is imperfect.But after more than a decade of development,the connotation and extension of the concept of the company's de facto controller are still vague,there are still a lot of deficiencies in the understanding of the de facto controller of company whether in judicial practice or in administrative supervision.As a matter of fact,the excessive control and the tunnel behavior of de facto controller is hard to restrain,which undoubtedly harms the development of Chinese capital market and the construction of social integrity and morality.Therefore,it's very important to clearly define the concept of the de facto controller.The body of this paper consists of four parts:The first part discusses the problems of defining the concept of de facto controller and necessity to define it clearly.What is “de facto control”? Are there restrictions on the subject of “de facto control”? Is there something special about multiperson control? These problems have been hovering over the relevant systems of Chinese de facto controller.And the discussion on these problems will help improve Chinese corporate governance,correct the misuse of de facto controller clauses,so as to protect the rights and interests of corporate stakeholders.The second part discusses what the de facto control is.Due to the differences in the domestic and foreign academic context,it's not the same meaning when people use “control” or “de facto control”.However,there is no concept of de facto controller in the meaning of Chinese Corporate Law in the theories related to corporate control.In addition to the factuality of de facto control,the analysis of de facto control need to start from the level of norms,only on the premise of eliminating misuse,can we determine the real connotation of de facto control.The third part discusses whether the subject identity of the de facto controller and its legal nature affect its identification.Under normal circumstances,the de facto controller shall be selected as a natural person with full civil capacity.However,as a socialist country,Chinese public ownership economy and collective ownership economy will exist for a long time and play an important role in China's social and economic development.For companies under such an economic system,its de facto controller may not be natural persons--the imaginary concepts such as the publicand collective is the main reason.Therefore,in the case that all relevant institutions are exercising their rights and performing their duties according to law,the de facto controller of a state-owned enterprise should be selected to the institution that is performing the responsibilities of the state-owned assets investor according to law,as to the collective enterprise,the natural person who enjoys the control rights in the village collective or employee stock ownership committee should be selected.Of course,if there is improper external intervention or imbalance distribution of internal rights and responsibilities,the identification of de facto controller still needs to make a specific analysis.The fourth part discusses the special form of de facto control--joint control.As far as the present situation is concerned,joint control is hard to be found in normative documents,but frequently appears in the regulatory field of listed companies.However,the joint control in accounting is not completely equivalent to the joint control in the company law.This paper,through the comparative analysis of these two subjects,defines the connotation of the company's joint control from the aspects of subject,ability,meaning and quantity.