Legal Consequences Of The Invalidation Of Shareholding In Lieu Of Shares

In recent years,the issue of shareholding has become quite popular,and scholars of corporate law are passionate about this topic,while scholars of civil law are not far behind.In recent years,the number of cases in which shareholdings have been held invalid by the courts,especially those of listed companies,has started to increase,which is urgently needed in practice,but the consequences of invalid shareholdings are rarely discussed in academic circles,and the existing literature and judicial decisions are also somewhat inappropriate.Therefore,it is necessary to discuss the legal consequences of the invalidation of shareholding.The first chapter is a brief introduction to the legislative,judicial and doctrinal studies.In the legislative level,the existing legislation lacks complete norms that can be invoked,which makes the judicial level lack of guidance and thus the difference in the path of adjudication,and the theoretical level lacks attention to this issue,so it is necessary to study the legal consequences of the invalidation of the proxy holding.The second chapter focuses on the legal consequences of the invalidation of the shareholding.It is the general practice of the courts to allocate the equity to the nominal contributors,which is also in line with the efficiency analysis.The determination of shareholder status in the event of a valid shareholding is distinguished by the exercise of shareholder rights,a criterion that is equally relevant after invalidation,while knowledge is not an element of practical significance.When discussing the attribution of equity in the event of invalidation,it is important to consider whether the regulation leading to invalidation is a prohibition on qualification and whether the acquisition of equity by the actual contributor would defeat the purpose of the regulation.Chapters 3 and 4 deal with the three ways for the actual contributor to obtain the appreciation gain if the actual contributor does not acquire the equity interest.The first way is to request the return of equity,the second way is to request the return of equity value,and the third way is to directly request the appreciation benefit,which are discussed below according to the basis of the request.Chapter 3 focuses on the request for equity by the actual contributor And claiming appreciation gains..Due to the procedural requirements for the change of equity,the actual contributor needs to determine the procedures to be performed according to the nature of the company in order to request equity.The claims that can be considered include the claim for contract performance,the claim for return of the original property,the claim for unjust enrichment and the claim for reversionary trust.After searching all avenues,none of the actual contributors can claim equity.The claim for performance of contract is invalid because the agreement on the vesting of the equity interest,which is the core clause of the shareholding agreement,is no longer valid,and there is no corresponding agreement,so there is no corresponding claim.The right of return of the original property is a property right,and the right of return of the original property is a property right,but the equity is not a property right.The right of return of ill-gotten gains can only be requested for the return of investment money,and equity is not "property acquired by the act",and the object of the claim may vary depending on the form of payment.However,under our legal system,the general provisions on invalidation of legal acts should be applied to invalidate trusts,and there is no provision for reversion to trusts.The right of claiming the return of equity value after the invalidation of equity holding is the right of claiming unjust enrichment.For the claim of equity value,since the subject of unjust enrichment return is the investment money,it does not compensate for the discount of equity,and the actual contributor has no legal basis to claim the equity value from the nominal shareholder.Chapter 4 discusses claiming the value of equity.If the actual contributor cannot claim the equity interest from the nominal shareholder and cannot claim the return of equity value,he/she should consider whether he/she can obtain the appreciation of the equity interest.The claims that can be considered when requesting the appreciation benefit after the shareholding is invalid include the claim for contractual performance,the claim for contractual negligence and the claim for unjust enrichment,and whether the actual contributor can request the appreciation of equity from the nominal shareholder.Currently,there is no convincing doctrinal approach to claiming the appreciation of equity and there is no systematic framework to consider how to allocate the appreciation between the parties.It is inappropriate for the court to apply the principle of distribution after finding the shareholding invalid.It should first consider whether the rules can be applied,such as the right to performance,etc.,and apply the principle only when the rules are not sufficient.The author believes that through the conversion of invalid legal acts,from the equity vesting agreement to "find" the agreement on the vesting of investment income,the agreement is not necessarily invalid,its effectiveness needs to be combined with the determination of the purpose of the regulation of the invalidity of the shareholding to determine whether the failure.Only if the agreement is invalid,there is room for the application of unjust enrichment and contractual negligence.Only if the above specific rules cannot be applied,there is room for the allocation of the applicable principles,and there is an order of application.Chapter 5 discusses the allocation of proceeds based on the principles.After considering the evolution of the wrongful cause system and the reasons behind it,it is difficult to expect the distribution of proceeds after the invalidation of the shareholding to be done once and for all at the legislative level,but should be left to the judges to decide on a case-by-case basis.Judges should use cost-benefit analysis as a tool for consideration rather than the principle of proportionality.Factors to be taken into account in the distribution of proceeds should include fairness,protection of investors’ interests,trustworthiness,and preservation of private autonomy.