News

The qualification of shareholders is one of the core issues of the legal system of the company, which is directly related to the exercise of shareholders' rights and obligations and the effectiveness of corporate governance. In the limited liability company, the qualification of shareholders involves a comprehensive judgment of the substantive and formal elements, based on which, it is necessary to distinguish between the internal legal relationship and external legal relationship to follow different processing principles. In practice, there are some disputes about the qualification of shareholders under special circumstances such as equity holding relationship and impersonation registration, the third part of this article will combine relevant cases to sort out the path of identification of shareholder qualification of special shareholders.JAVY Item I. Criteria for confirmation of shareholders' qualification (a) Substantive elements of confirmation of shareholders' qualification (b) Formal elements of confirmation of shareholders' qualification
Principles of Handling Disputes on Confirmation of Shareholders' Qualification (i) Internal Legal Relationship of the Company (ii) External Legal Relationship of the Company
Third, the recognition of shareholder qualification under special circumstances (a) the treatment of equity holding relationship (b) the recognition standard of impostor registration
JAVY I. Criteria for the Recognition of Shareholders' Qualifications
(I) the substantive elements of shareholder qualification confirmation
Substantive elements of shareholders' qualification refer to the inherent conditions for shareholders to obtain qualification, which mainly include the act of capital contribution, the exercise of shareholders' rights and the fulfillment of shareholders' obligations. According to the Company Law and relevant judicial interpretations, the substantive elements of shareholder qualification are mainly reflected in the following aspects:

1. The main criterion - the act of capital contribution. Capital contribution is the most basic condition for shareholders to obtain qualification. The act of capital contribution for the acquisition of equity by shareholders is not limited to the actual capital contribution, but also includes the contribution of subscription, i.e., the act of committing to the capital contribution in the share subscription agreement or the articles of association of the company. According to the provisions of Article 49 of the Company Law, shareholders shall pay the capital contribution in full and on time in accordance with the provisions of the articles of association. Capital contribution is not only the obligation of shareholders, but also the basis of their rights. In judicial practice, the court will usually examine whether the shareholders actually contributed or subscribed to the capital, as an important basis for determining the qualification of shareholders.
2. Auxiliary criteria - the exercise of shareholders' rights. In judicial practice, for the sake of maintaining the stability of the transaction, the people's court will not easily deny the investor's qualification as a shareholder who has actually enjoyed the equity. The rights of shareholders include the right to participate in corporate decision-making, the right to dividends, the right to vote and so on. In disputes over the confirmation of shareholders' qualification, the court usually examines whether the shareholders have actually participated in the operation and management of the company and whether they have exercised their rights as shareholders. Whether the investor actually enjoys the shareholder rights can be used as an auxiliary standard for confirming the shareholder qualification.
In the case of Shi Moumou v. Lund County, a trading company shareholder capital contribution dispute [Accession No.: 2023-08-2-265-001], the court's reasons for decision part of the following: “on the Shi Moumou to Lund County, a trading company, whether to invest in form and substance to obtain the qualifications of shareholders, the exercise of shareholders' rights; can be recognized as a shareholder status: although the Lund County, a trading Although the company has not been for stone a certain equity did not do business registration, and shareholders roster, but because of the evidence in the case of lund county a trading company shareholders meeting, authorization, minutes, articles of association, meeting resolution, dividend clearing list, etc. on the signature of stone a certain person, and stone a certain person on the authenticity of its name to be recognized. In the court hearing ShiMouMou also said from lund county a business trading company dividend more than 30,000 yuan, constitute legal self-recognition, in summary, ShiMouMou to lund county a business trading company made investment, the company “constitution” has been recorded as a shareholder of the company, and participated in the company's business decision-making and management, and from the company to obtain dividend, in the company within the company, ShiMouMou actually obtain the qualification of the shareholders, the exercise of shareholders' rights, and the identity of its shareholders is sufficient to identify. ” The main points of the decision in this case contained in the section, “In the internal relationship of the company, whether the shareholders actually enjoy the rights of shareholders should be fully considered, such as through participating in the shareholders' meeting, obtaining dividends from the company to participate in the company's operation and management, etc., to determine the identity of the shareholders.”

(ii) Formal elements of shareholder qualification confirmation
The formal elements of shareholder qualification refers to the external manifestation of shareholder qualification, mainly including the articles of association, the register of shareholders, industrial and commercial registration and so on.The role of formal elements is to publicize the identity of shareholders to ensure the security of transactions and the protection of the interests of third parties.
1. industrial and commercial registration. The industrial and commercial registration is an important way for the company to publicize the information of the shareholders, which has the effect of publicity and credibility. According to the provisions of Article 32 of the Company Law, the company shall register the names of the shareholders with the company registration authority, and without registration or change of registration, it shall not be confronted with the third party. Industrial and commercial registration in the external legal relations of the company has a high level of proof, especially in disputes involving the interests of third parties, the court will usually use industrial and commercial registration as the main basis for determining the qualification of shareholders.
2. Articles of Incorporation.The articles of association is a legal document jointly signed by the shareholders at the time of the establishment of the company, which records the basic information of the shareholders, the amount of capital contribution, the mode of capital contribution and so on. According to the provisions of Article 46 of the Company Law, the articles of association shall contain information such as the name of the shareholder, the amount of capital contribution, the method of capital contribution and the date of capital contribution.The shareholders recorded in the articles of association, internally, is the main basis for determining the shareholders and their rights and obligations, and externally, because the articles of association need to be submitted to the industrial and commercial registration authority for the record, so at the same time has the credibility of the public, and is the basis for external third parties to judge the shareholders of the company.
3. Register of shareholders.The shareholders' register is a book for recording shareholders' information within the company. According to Article 56 of the Company Law, a limited liability company shall keep a shareholders' register, which shall record the names and domiciles of shareholders as well as their capital contributions and other information.Shareholder register is an important basis for determining the qualifications of shareholders within the company, with the presumption of validity.
In judicial practice, the court will usually examine whether the shareholders actually contributed or subscribed to the capital, as an important basis for determining the qualification of shareholders. 2. Auxiliary criteria - the exercise of shareholders' rights.
In judicial practice, for the sake of maintaining the stability of the transaction, the people's court will not easily deny the investor's qualification as a shareholder who has actually enjoyed the equity.The rights of shareholders include the right to participate in corporate decision-making, the right to dividends, the right to vote and so on.In disputes over the confirmation of shareholders' qualification, the court usually examines whether the shareholders have actually participated in the operation and management of the company and whether they have exercised their rights as shareholders.Whether the investor actually enjoys the shareholder rights can be used as an auxiliary standard for confirming the shareholder qualification.

JAVY II. Principles for dealing with disputes over recognition of shareholders' qualifications
Shareholder qualification disputes in judicial practice should be distinguished as involving the company's internal legal relations and the company's external legal relations of two situations, so as to apply different principles.
(I) Internal legal relationship of the company
The internal legal relationship of the company means that the dispute subject of the dispute over the confirmation of shareholders' qualification does not involve the shareholders, third party other than the company. When it comes to the internal legal relationship of the company, the handling of disputes over the confirmation of shareholders' qualification shall follow the principle of substance over form, i.e., follow the principle of intentionalism of the parties, and confirm the shareholders' qualification on the basis of the parties' true intention and actual capital contribution behavior. Article 22 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (III) establishes the relevant substantive review standard, which stipulates that, if there is a dispute between the parties over the attribution of equity, and a party requests the People's Court to confirm that it is entitled to the equity, it shall prove one of the following facts: (a) it has already made contributions to the company in accordance with the law, or has subscribed to the contributions, and it does not violate the mandatory provisions of laws and regulations (ii) has been transferred or other forms of succession to the company's equity, and does not violate the mandatory provisions of laws and regulations.
In the case of Zhan Moujiang et al v. Certain Firecracker Company Shareholder Qualification Confirmation Dispute [Case No. 47 of the First Instance: (2017) Qian04 Minchu; Case No. 926 of the Second Instance: (2017) Qianminzhu; Case No. 37 of the Second Instance: (2018) Qian04 Minchu], the Intermediate People's Court of Anshun City of Guizhou Province held in the first instance that the qualification of shareholders was obtained after the signing of the Articles of Incorporation, the contribution of capital, the obtaining of the capital contribution certificate, the recording of shareholder registers and the carrying out of industrial and commercial activities. , recording in the register of shareholders and conducting business registration and other procedures. In this case, the two plaintiffs do not have the necessary elements to become a shareholder, so the judgment rejected the two plaintiffs. The two plaintiffs appealed against the judgment. Guizhou Province Higher People's Court ruled to revoke the judgment and remanded for retrial. Anshun middle court retrial that: the dispute between the shareholders and the company or promoter shareholders on the qualification of shareholders, essentially belongs to the scope of the corporate system.
In this case, the two plaintiffs and Xu mouxiang in the firecracker company before the establishment of the company, respectively, for the establishment of the company to do the corresponding preparatory work. After the establishment of the company, and the investment table and the joint venture share agreement, the preliminary preparations for the establishment of the company in the process of the parties to summarize the situation of capital investment, the establishment of the company's shareholding, the rights and obligations of shareholders have agreed. Accordingly, the two plaintiffs and xu mouxiang can be identified as the existence of the joint establishment of the company's intention, and for this equity capital, meet the substantive requirements of the identity of the shareholders. Anshun court then ruled: confirm the two plaintiffs for the firecracker company shareholders, and each accounted for 30% of the company's shares. From this case can be seen, for the company within the qualification of shareholders, should focus on the examination of whether the investors have reached the establishment of the company's consent, whether the actual capital contribution, the composition of the shares of whether there is a clear agreement on the substantive factors to be a comprehensive determination. Whether the investor's signature in the company's articles of association, whether there is a certificate of capital contribution issued by the company, whether it is recorded in the register of shareholders, whether it is publicized by the industrial and commercial registration and other formal elements of the identity of the shareholders, can not be used as a reason for denying the identity of the investor's shareholders.

(ii) Legal relations external to the company
The external legal relationship refers to the dispute subject of shareholder qualification confirmation disputes involving shareholders, third parties outside the company, such as company creditors. When it comes to the company's external legal relations, the handling of disputes over the confirmation of shareholders' qualifications shall follow the principle that formal elements are superior to substantive elements, i.e., the industrial and commercial registration materials shall be the main basis for confirming the qualifications of shareholders. In the external legal relationship of the company, the industrial and commercial registration has the effect of publicity and credibility, and the third party can make commercial judgment based on the content of the industrial and commercial registration.According to the provisions of Article 34 of the Company Law, without registration or change of registration, it shall not confront the bona fide relative.If the third party transacts with the company based on the content of business registration, even if there is an error in the business registration, the third party can still claim its rights.
In the case of Xinxiang Huitong Investment Company Limited, Han Dong Outsider Execution Objection Lawsuit [(2018) Supreme Court Civil Re-325], the Supreme Court clarified the protection of reliance interests by appearanceism on the issue of the determination of shareholder qualification, “Commercial law has the principles of publicity and appearanceism, and the external effect of the company's publicity is mandatory to a certain extent. Article 32 of the Company Law is very clear, the company shall register the name or names of the shareholders and the amount of capital contribution to the company registration authority, changes in the registered matters shall be changed and registered, without registration or change of registration, shall not be against the third party, according to the law of the registration of the shareholders of the external effects of publicity ......The risk of shareholding should not be borne by creditors.Creditors can only judge the property of nominal shareholders through external information, equity information is available, but there is no way to know the escrow relationship, belonging to the creditor's unforeseeable risk, can not be demanded that the creditor to do this duty of inquiry, the risk sharing should be tilted towards the protection of creditors.”

JAVY III. Recognition of shareholders' qualifications under special circumstances
(A) the treatment of equity holding relationship
Equity holding refers to the agreement between the actual contributor and the nominal shareholder, the actual contributor of capital and enjoy the rights of shareholders, nominal shareholders only in the articles of association, shareholders' register and industrial and commercial registration as shareholders.In the equity holding relationship, the determination of shareholder qualification involves the legal relationship between the actual contributor and the nominal shareholder.
1. Legal relationship between the actual contributor and the nominal shareholder: According to Article 24 of the Provisions of the Supreme People's Court on Certain Issues in the Application of the Company Law of the People's Republic of China (III), the equity holding agreement between the actual contributor and the nominal shareholder shall be recognized as valid if there are no invalid circumstances stipulated by law.The actual contributor may claim the rights of the shareholders based on the agreement, but with the consent of more than half of the other shareholders of the company.
In the case of Chen Weiwei's dispute with Chen Zhiming, Li Ya Ting and other creditors' right of revocation [(2016) Supreme Court Civil Court No. 310], the Supreme Court held that, according to Article 24 of Judicial Interpretation III of the Company Law, the prerequisite for recognizing the relationship of shareholding in lieu of shareholding is that the actual contributor and the nominal contributor enter into a valid contract, which explicitly agrees on the relationship of shareholding in lieu of shareholding, i.e., the actual contributor contributes the capital and enjoys the investment rights and interests, and the nominal contributor is the nominal shareholder.The nominal contributor is the nominal shareholder.
2. The legal relationship between the actual contributor and the company and other shareholders: in the disputes between the actual contributor and the company and other shareholders, the court usually examines whether the actual contributor actually participates in the operation and management of the company and exercises the rights of shareholders.If the actual contributor actually participated in the company's management, and the company's other shareholders are aware of this, the court will usually find that the actual contributor has the qualification of shareholders.
(ii) Criteria for the Recognition of Impersonal Registration
Impersonation registration refers to the impersonation of the registrant in the name of another person and registered as a shareholder, the impersonation of the person does not know. In the case of fraudulent registration, the impostor registered to the company to fulfill the obligation to contribute and actually participate in the company's management, exercise the rights of shareholders and bear the risk of investment. The person whose name is assumed does not know that his name has been used fraudulently, and has no intention to become a shareholder of the company, and does not participate in the company's management and exercise the rights of shareholders. According to the provisions of Article 28 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (III), the impostor registrant shall bear the corresponding responsibility, i.e., the impostor is not a shareholder of the company in actuality, and does not need to bear the responsibility of the shareholders.

Ltd. shareholder qualification confirmation dispute case [(2016) Su Minzhi No. 837], the court held that, “Impersonation registration refers to the behavior of the actual contributor exercising equity by himself, but fictionalizing the legal subject or stealing the name of another person and registering the subject or another person as a shareholder in the company registration authority. The person whose name is assumed should not be regarded as a legal shareholder because he or she is unaware of the act and has never made any indication of his or her intention to hold an equity interest, does not actually make any capital contribution, and does not participate in the management of the company. To determine whether the impostor or borrowed name, the most important legal characteristic is the impostor's knowledge of the impostor's name being used.In this case, although the industrial and commercial registration recorded Qian Zhongping as a shareholder of Huayuan, but from the analysis of the facts identified, this court finds that the registration is a high degree of probability that Huayuan operates under an impostor's name, and that Qian Zhongping should not be recognized as a shareholder of Huayuan ...... In summary, since there is no evidence to prove that Qian Zhongping has contributed capital, dividends, and managed the company, and since the finding that Qian Zhongping has contributed capital under a borrowed name also lacks an objective and reasonable basis, this Court finds that Qian Zhongping is registered as a shareholder of Huayuan Company under an impostor's name, and that Qian Zhongping's appeal of confirming that he is not a shareholder of Huayuan Company is substantiated.”

In summary, the determination of shareholder qualification is the core issue in the company's legal system, which involves the comprehensive judgment of substantive and formal elements. In judicial practice, the court usually distinguishes between internal and external legal relationships and applies different principles according to the specific circumstances of the dispute.When it comes to the company's internal legal relations, the court will usually give priority to the review of the substantive elements of the shareholders; when it comes to the company's external legal relations, the court will usually give priority to the review of the formal elements, in particular, the effectiveness of the industrial and commercial registration of the publicity and credibility.
In special cases, such as equity holding, impersonation registration, etc., the court will comprehensively judge the attribution of shareholders' qualifications according to the specific circumstances.