A Study Of Method To Protect The Interest Of Dormant Shareholder In The Limited Liability Company

With a growing introduction of foreign investment since the reform and open policy in 1979, a great number of unnamed equity emerges in capital market including nominal investment, nominal partnership, loan, nominal holding etc. In practice, there is a lot of contradictory judgment based on the same situation. Investment of unnamed equity as an up-to-date method of investment is not completely prohibited by law, and therefore permitted. Jefferson once said, law and regulation shall keep pace with the progress of human mind. Unnamed equity investment is a model that practice makes the law. In 27/1/2011, when “the people’s supreme court’s company law judicial interpretation III” became effective, it promotes the development of new way of investment including unnamed equity, but in view of “company law judicial interpretation III”, there is some uncertainty in the qualification of shareholder of unnamed investor and there is a lack of regulation in manifestation of unnamed shareholder and mechanism to withdraw share, and there is also some contradiction in the regulation as well, which leads to the ambiguity of juridical status of unnamed shareholder in company law. Dormant investment involves a distribution of interest among unnamed investor, nominal investor, company, other shareholders and the third party, and therefore it is very complicated. On the other side, it is not easy to find the fact for its nomination character, no matter for the partner in unnamed equity investment contract or the company and the third party. Therefore, it is meaningful to clarify the juridical status.From overall, the article includes four chapters, specifically:The first chapter is about the history and present of law and regulation in unnamed equity investment. This chapter includes three parts. The first part is about the history of law and regulation from the supreme court and the high court in unnamed equity investment. The second part is analysis of the people’s supreme court’s company law judicial interpretation III in three different angles, dormant investment relationship, legal relation inside and outside the company. The third part is a conclusion of the first two parts and a guide of the second chapter.The second chapter is about the legal character of dormant investment. This chapter includes three parts. The first part is about the connotative meaning of dormant investment. The second part is about three models of legal government of dormant investment. The third part is about dualistic character of dormant investment. These three parts is a lead of next two chapters about the analysis under two models of legal government of dormant investment.The third chapter is about dormant investment under the legal government of agency mode. The second part is agency regime and legal status of dormant investment. The third part is about protect of the third party’s interest.The fourth chapter is about legal government of dormant investment under trust. This chapter includes two parts. The first part is basic principle of equity trust. The second part is about changing of dormant investment under trust.