What does it mean to hold shares on behalf of others?

Question 1: What do you mean by holding shares on behalf of individuals? China enterprises and their holding subsidiaries and overseas branches hold state-owned property rights (shares), shares, property or other assets of overseas enterprises in the name of individuals or individual companies.

Question 2: What does the shareholder mean? It means holding shares for others.

Equity holding, also known as entrusted shareholding, anonymous investment or false name investment, refers to a kind of equity or share disposal method in which the actual investor agrees with others to perform shareholders' rights and obligations on behalf of the actual investor in the name of the other person.

Generally speaking, there are several reasons for holding shares on behalf of the company: First, real investors are unwilling to disclose their identities. For example, some real investors are state employees and cannot operate the company. So, find someone else to hold shares. Second, in order to avoid related party transactions in operation, find someone else to hold shares on behalf of them. Third, in order to avoid the restrictions of national laws on the upper limit of shareholding in certain industries, find someone else to hold shares on behalf of them. Fourth, some companies have special requirements for shareholder status, and those who do not meet the requirements also want to become shareholders, so they privately invest and ask others to hold shares on their behalf.

No matter for what purpose, holding shares on behalf of the principal must form a shareholding agreement with the trustee. If the agency agreement itself does not violate the provisions of national laws, mainly does not cover up the illegal purpose in a legal form, and does not maliciously collude to harm the interests of others, the agency agreement will generally be legal. But this legitimacy only exists between the two parties who signed the contract and is not binding on the third party. This will bring the following risks to clients and customers:

First, register

Shareholders in the administrative department for industry and commerce are entrusted shareholders, but they are not real investors. However, the confirmation of shareholder qualification is based on the stock certificate and industrial and commercial registration, if the above documents are recorded on behalf of shareholders. When contemporary shareholders have other debts that cannot be paid off, the court and other competent authorities may seal up the above-mentioned equity according to law to pay off the debts of shareholders with the above-mentioned equity. At this time, the real investor can only claim compensation liability from shareholders according to the shareholding agreement.

Second, when a contemporary shareholder dies under special unexpected circumstances, the above-mentioned equity under the shareholder's name will become the object for the heirs to compete for the inheritance property. The client had to be involved in this dispute over inheritance, and it took a lot of effort to get back his property rights intact.

Third, some real investors do not participate in the operation and management of the company. In this case, the shareholders' rights of investors include management right, voting right, dividend right, priority of capital increase, distribution right of surplus property and so on.

In fact, profits are all exercised by shareholders. Obviously, moral hazard is enormous. It is difficult for real investors to control the transfer and pledge of shares on behalf of shareholders. Therefore, even if the company has a good development prospect and huge benefits, you should not participate in the investment rights that you can't actually control.

Fourth, for those who deliberately evade national laws, once someone requests to confirm the illegality on this basis, it will bring great risks to the company's operation.

Question 3: Is it legal to hold shares on behalf of others? It is more reliable to consult relevant lawyers for this kind of problem.

Question 4: What are the risks of holding shares for others? There is no risk in holding shares on their behalf, but the risk is in your hands. As long as you don't operate, this is risky.

Question 5: What is the legal basis of the agency shareholding agreement? There is no direct legal basis, but China still protects dormant shares on the basis of contract law, so the protection is weak. In addition, listed institutions are also not allowed (administrative regulations).

Question 6: What legal responsibilities should I bear on behalf of shareholders? Has the register of shareholders changed after holding shares on behalf of shareholders? As shareholders, as long as they fulfill their capital contribution obligations and fulfill their responsibilities in accordance with the articles of association and the Company Law, there will be no criminal legal risks. In the normal operation of the company, the company's property will not be occupied by other means, and there will be no greater civil legal risks.

If the actual shareholders who hold shares on your behalf ask you to make some decisions that are unfavorable to the company, you can refuse.

What you should pay attention to is the agreement between you two about holding shares on behalf of shareholders. Generally speaking, disputes arise between the two parties because of the performance of the agency agreement.

Question 7: What about the virtual shareholders who hold shares on their behalf? The so-called virtual shareholders refer to the fact that the number of shareholders in the company has not reached the quorum, but the number of shareholders has reached the minimum number stipulated by law by virtual means. At present, the common phenomena of virtual shareholders are:

First, asking many people to invest is actually a one-person investment to form a substantial one-person company. For example, if all shareholders are family members, they are likely to be virtual shareholders.

Second, the so-called Sino-foreign joint venture, in fact, is all invested by the Chinese side, and the foreign side has not paid a penny. The purpose of the actor's fiction is to defraud preferential treatment, thus damaging the interests of the state and possibly the creditors;

Third, the shareholding ratio of shareholders is seriously out of balance, which is extremely disproportionate, and it is also prone to the phenomenon of virtual shareholders.

Virtual shareholders are shareholders of the company who do not exist in reality, and should not be confirmed as legal shareholders.

Question 8: Are listed companies allowed to hold shares on their behalf? Whose name is theirs does not mean that they hold it or transfer it.

Question 9: How to exercise the rights of actual shareholders by fraudulent acts of nominal shareholders in modern equity is inherently risky. The client may inform other shareholders of the company of the entrustment relationship in writing, and notify the client to cancel the entrustment agreement, and handle the change of shareholders and industrial and commercial registration.

Question 10: As a legal person, the company has given shares to others, and now the company wants to borrow money. What are the risks? The risks of the legal representative are as follows:

Article 49 of the General Principles of the Civil Law stipulates the legal liability of the legal representative of an enterprise: if an enterprise as a legal person is under any of the following circumstances, in addition to investigating the legal person's liability, it may impose administrative sanctions and fines on the legal representative, and if the case constitutes a crime, it shall be investigated for criminal responsibility according to law:

(1) engaging in illegal business beyond the business scope approved and registered by the registration authority;

(2) Concealing the real situation from the registration authority or the tax authority or practicing fraud;

(3) Evading funds or hiding property to avoid debts;

(4) Disposing of property without authorization after dissolution, cancellation or bankruptcy;

(5) Failing to apply for registration and announcement in time at the time of alteration or termination, thus causing great losses to the interested parties;

(six) to engage in other activities that harm the national interests or social public interests prohibited by law.

In other words, most of the legal business activities of the legal representative (that is, the executive organ such as the chairman of the company) will be regarded as civil acts of enterprise legal persons, and the enterprise legal persons will bear civil liabilities. If an enterprise as a legal person engages in the relevant business approved at the time of registration and operates legally, the legal representative shall not be liable for timely registration and announcement at the time of bankruptcy, dissolution or cancellation of the enterprise.