Study On The Litigation Of The Actual Investor’s Execution Objection Of Limited Liability Company

In the process of Chinese commercial activities,actual investors of some limited liability companies sign equity entrusting agreements with others,who hold the equity on behalf of others,register the equity in the name of the entrusting shareholder,and become nominal shareholders.The actual investors themselves are hidden behind the scenes,which separates the nominal owners of corporate equity from those who actually enjoy equity income.While meeting the needs of actual investors,it also makes the legal relationship complicated and increases the difficulty of dispute settlement.When there is a dispute between the nominal shareholder and others,resulting in the compulsory execution of the equity under his or her name,the actual investor,based on the equity entrustment agreement,raises an objection to the object of execution at the execution stage.If the court refuses to accept the ruling,he or she then files a lawsuit against the execution objection,in order to prevent the execution and safeguard his or her own interests.But from the practical effect,there are still many problems in the execution relief procedure caused by entrustment of shares.The public opinion draft of the Law of the People’s Republic of China on Compulsory Civil Enforcement(Draft)released in June 2022(hereinafter referred to as the "Draft Law on Compulsory Enforcement")has responded to the long-standing problems of enforcement in the past,but it still fails to fundamentally solve the existing problems of litigation against enforcement objections.Specifically to this article: the execution objection as the pre-procedure of the action of the execution objection still has defects;The distribution of burden of proof and the standard of proof between the actual investor and the person applying for execution in the action of execution objection are miscellaneous;The court has a great dispute on the judgment of such cases.One side believes that the trust interests of the applicant should be protected based on the doctrine of commercial appearance,and the court rejects the appeal of the actual investor.The other side believes that the executor is not a "third person" in the doctrine of commercial externalism,the interests of the actual investor should also be considered,and the judgment supports the appeal of the actual investor.At present,there is no lack of research on issues related to entrustment of shares,but it mainly focuses on the confirmation of shareholders’ qualifications,the effectiveness and nature of the entrustment agreement and the discussion on the behavior of entrustment of shares.In this paper,from the perspective of execution,aiming at the action of execution objection caused by equity holding on behalf,on the premise of clarifying the type of actual investor and the person applying for execution,this paper puts forward suggestions to improve the system of execution objection,enhance the flexibility of the operation of the certification system,and unify the hearing standard of claims,in order to realize the same judgment of the class cases.