Research On The Rights And Obligations Of The Dormant Shareholders In Limited Liability Company

Anonymous capital contribution cases are very controversial in judicial practice,in which a large number of disputes are reflected in disputes over the rights and obligations of dormant shareholders.The Company Law of China does not provide for the definition of "shareholder" and its defining elements.In the case of anonymous capital contribution,the parties concerned often have fierce disputes over who is the shareholder.As disputes over anonymous capital contribution have long plagued the judicial practice,the Supreme People’s Court promulgated Provisions of Supreme People’s Court on Certain Issues Concerning the Application of the “Company Law of the People’s Republic of China”(III)to regulate anonymous capital contribution.However,the judicial interpretation has not still answered such fundamental issues as the dormant shareholders’ legal status.Its attention to anonymous capital contribution still cannot meet the complicated and changeable needs of the practice.Meanwhile,the judicial interpretation has been criticized by the academic circles for a long time because the provisions’ inherent logic is in conflict with each other.Therefore,up to now,the unanimous conclusion on what rights and obligations the dormant shareholders can exercise and what obligations they should undertake have failed to be reached.The academic circle has done a lot of research on the rights and obligations of anonymous investors.Some scholars take the legal nature of entrusted equity as the breakthrough point,and complete the allocation of rights and obligations among the parties with the help of mature legal system;others directly take the identification of shareholder qualification as the breakthrough point,trying to solve the issue of rights and obligations of the dormant shareholders by solving the fundamental issue of who is the shareholder.In essence,the fundamental reason for the disagreement on the rights and dormant investor’s rights and obligationsder normal circumstances,the shareholders of the company should have both the substantive and formal elements of capital contribution.However,in the special case where the substantial element and the form element of equity are separated,the legal status of the dormant shareholders is unclear because the role of each element is unclear.Therefore,the key to solve the issue of rights and obligations of the dormant shareholders is to clarify the effectiveness of all elements of equity in the identification of equity,and thus to confirm the legal status of the dormant shareholders.In order to Toe legal status of the dormant shareholders,one of the prerequisites is the relationship between the shareholders’ qualification and the ownership of equity.For a long time,the concept of shareholder qualification and the ownership of equity has not been distinguished.However,the confusion caused by the legal status of the dormant shareholders is largely caused by the binding of the concepts of the ownership of equity and the ownership of shareholders’ qualification.Investors should acquire property rights,but the operating logic of the organizational law requires that only those who are registered shareholders can make claims to the company.The dormant shareholders can’t exercise the right freely based on the capital contribution,and the anonymous shareholders can claim the rights to the company but don’t really and finally enjoy the benefits of the equity,which leads to the confusion.In fact,the ownership of equity and the qualification of shareholders solve the problems at different levels.The ownership of equity,as the name implies,solves the issue of who enjoys the value of the equity and whose liability property is equity,while the significance of the qualification of shareholders is to confirm who is entitled to claim the rights of shareholders against the company.By unbinding the ownership of equity and the qualification of shareholders the theoretical predicament of anonymous capital contribution can be effectively broken by making the civil law return to the civil law and the company law to the company law.Under the logic of separation of equity ownership and the qualification of shareholders,the capital contribution determines the ownership of equity.The opinions of other shareholders of the company determine the acquisition of the qualification of shareholders.The register of shareholders shall be presumed to have the qualification of shareholders,while the business registration has an antagonistic effect.Without the business registration and commerce,no one may act against any third party involved in a transaction.Further,in respect of an anonymous capital contribution,the equity is vested in the dormant investor.If it is completely anonymous,the dormant investor is entitled to the equity ownership,but has no right to claim the rights as a shareholder against the company.After obtaining the express or implied consent of more than half of the other shareholders,an dormant investor enjoys shareholder qualification and asserts against the company the rights as a shareholder.After the legal status of the dormant investor is clarified,the rights and obligations of the dormant investor can be resolved.For internal disputes,the dormant investor truly has the equity interest and there is no application of appearance-oriented principle between the dormant investor and the nominal shareholder.Therefore,the dormant investor has the right to require the nominal shareholder to deliver the economic benefits generated from the equity interest and require the nominal shareholder to follow the company’s instructions to conduct internal activities.Still,the dormant investor shall not have the right to make any request directly from the company.For external creditors,a bona fide creditor of a company has the right to require the nominal shareholder to bear the liability for defective capital contribution based on its trust in the business registration.However,a creditor who knows that the equity is held on behalf of others can only require the dormant investor to bear the liability for defective capital contribution.For the general creditors of the nominal shareholder and the dormant investor,as the equity registration is only the third party involved in the transaction,the rights and obligations of each party shall be determined according to the substantial ownership of the property in the stage of execution.Although the legislative logic of dormant investment has been straightened out in the framework of the current law,the relevant provisions still need to be perfected.The property right can be disposed of freely by the subject of the right.However,the restriction on the condition of registration of dormant shareholders and the restriction on the transfer of stock rights are the same legitimate basis,which is to protect the human joining of the limited liability company.So it is better to unify the registration of dormant shareholders and the restriction on the transfer of stock right to realize the logical coherence within the legal system.