the people's court may directly determine the rights of the anonymous shareholders (the trial rules determined in the reference cases published in the supreme court publication)
column:judicial cases time:2018-11-05

[trial rules]

the parties invested in the registered capital of the investment enterprise and actually controlled the investment enterprise in the business activities. at the same time, the parties also confirmed the dividends they received from the investment company. this behavior is an important form of expression for the shareholders to enjoy and exercise their rights, that is, the parties are the anonymous shareholders of the investment enterprise. therefore, the court can directly judge the rights of its anonymous shareholders during the lawsuit.

【key words】

civil enterprise investor's rights and interests confirmation investment enterprise registered capital business activities actual control dividends hidden shareholders during the litigation period approval authority direct judgment

[basic case]

gao hat company (high hat co., ltd.) appointed chen zhaoyu, manager of the company's management department, to invest in shanghai, preparing for the establishment of a domestic-funded enterprise (yubai company) shanghai yubai clothing industry co., ltd. and shanghai ruiguan company (foreign-invested enterprise shanghai ruiguan clothing co., ltd. company), because of the relationship between chen zhaoxuan and bai x, the cypress x became the first employee employed by gao hat. after that, chen zhaoyu found his relatives, li x and bai x, and became shareholders in the name of li x and bai x. they registered shanghai yubai clothing industry co., ltd., and later changed their names to shanghai yubai trading co., ltd. and shanghai company. the registration and start-up fees of the above-mentioned domestic enterprises are paid by gao hat company. before registering the company, chen zhaoxuan and li x and bai x agreed that the two were only nominal shareholders. the high hat company was the actual shareholder. the capital, management, investment income and risk responsibility were all handled by gao hat company. after the establishment of shanghai ruiguan co., ltd., working with the aforementioned domestic companies, chen zhaoyu was the general manager of the two companies and was responsible for the overall business. bai x is the company's salesman, and bai x's father, bai yun, is the financial director of the two companies, and li x does not hold the company's position. gao hat company injected $50,000 in capital into yubo. since 2001, the legal representative of gao hat company, x, has served as the general manager of the two companies, and actually managed yubo company as the actual controller. in the face of the improvement of the company's operating conditions and the increase in profits, bai x and his father bai yun began to refuse to obey the instructions of the high hat company since december 2006, and actually controlled yubo company, illegally possessing the assets of the company invested by gao hat company for a long time. and income.

in order to protect its legitimate rights and interests, gao hat company filed a lawsuit requesting confirmation that it enjoyed the entire equity of yubai company; it required li x and bai x and third parties to return the investment income of rmb 9 121 379.31, and they were jointly and severally liable. after the high hat company withdrew the above second lawsuit.

bai x, li x, and yu bai company jointly pleaded that the two sides have never agreed to a hidden investment. the high hat company and the two are only brand-agent relationships. the name of the high hat company has not appeared in the business registration materials and the company's shareholder register. during the pre-operation period of yubai company, bo x asked chen zhaoxuan and the correspondence with the legal representative of gao hat company 阙x to consult in good faith. when the company was incorporated, the party as a shareholder fully contributed capital and enjoyed shareholder rights according to law, so the court was requested to reject the high hat company's claim.

[disputed focus]

the parties invested in the registered capital of the investment enterprise, and actually controlled the investment enterprise in the business activities. at the same time, the parties obtained the enterprise dividend, and the party may be denied as the hidden shareholder of the enterprise.

[trial result]

the court of first instance ruled: confirm that gao hat company enjoys 100% equity of yubai company.

bai x and li x refused to accept the judgment of the first instance and filed an appeal.

the judgment of the second instance court: dismissed the appeal and upheld the original judgment.

[analysis of trial rules]

gao hat company not only invested in the registered capital of yubai company, but also actually controlled yubo company in its business activities. at the same time, gao hat company has proved its evidence of actual capital contribution to yubai company as an actual funder, and also confirmed its dividend from yubo company. this behavior is an important manifestation of shareholders enjoying and exercising their rights. . from this point of view, gao hat company is the unnamed shareholder of yubo company, and bai x and li x’s behavior of transferring profits to yubo’s profitable share is after the high hat company loses control of yubai company. x's personal behavior is not the normal exercise of rights by shareholders in the sense of company law. however, during the lawsuit, the court sent a letter to the shanghai municipal commission of commerce regarding the change of shareholders of yubai company. the reply of the committee was that there was no prohibition or restriction on taiwanese investment in the business scope of the third-party company. in summary, the high hat company's litigation request has facts and legal basis, and should be supported according to law.

【applicable law】

article 4 of the "company law of the people's republic of china" the shareholders of the company enjoy the rights of asset income, participation in major decisions and selection of managers in accordance with the law.

article 14 of the supreme people's court's provisions on several issues concerning the trial of disputes over foreign-funded enterprises (i) stipulates that one party actually invests and the other party acts as a nominal shareholder of a foreign-invested enterprise, and the actual investor requests confirmation of its foreign-invested enterprise. the people's court does not support the status of shareholders in the case of requesting changes to shareholders of foreign-invested enterprises. except for the following conditions:

(1) the actual investor has actually invested;

(2) other shareholders other than the nominal shareholders recognize the identity of the actual investor;

(3) the people's court or the party concerned has changed the actual investor into a shareholder during the litigation and obtained the consent of the examination and approval authority of the foreign-invested enterprise.

[legal documents]

civil complaints civil defences civil appeals civil appeals appeals lawyer's submissions civil first judgment civil second judgment

[effect and conflict avoidance]

reference case valid reference

 

high hat co., ltd. v. bai x, li x enterprise investors' rights and interests confirmation dispute

 

[case information]

[中法码]company law·shareholders and equity·shareholder qualification·unknown shareholders·shareholder recognition (c040105018)

[case no.] (2011) hu gaomin ii (business) end word no. 14

[case] enterprise investor rights confirmation dispute

[date of judgment] december 19, 2011

[authoritative announcement] enrolled in the 4th edition of the 2012 selected cases of the people's court of the chinese academy of applied law of the supreme people's court (total 82)

【search code】 b0208228 sh 0411c

[trial court] shanghai higher people's court

[trial procedure] second trial procedure

[trial judge] huang ying wang jing wang qian

[appealer] cypress x li x (both defendants in the original trial)

[appellee] high hat co., ltd. (plaintiff in the original trial)


 

[original text of the referee] (if you use, please check the original contents of the judgment document)

"civil judgment"

appellant (defendant in the original trial): bai x, male, han nationality, born on december 20, 1970, lives in room 204, no. 930, shangcheng road, pudong new area, shanghai.

appellant (defendant in the original trial): li x, female, han nationality, born on may 8, 1940, with the address of the defendant bai x.

appellee (plaintiff in the original trial): gao hat co., ltd., the third floor of no. 4, lane 6, lane 235, baoqiao road, xindian city, taipei county, taiwan.

the third person in the original trial: shanghai yubai clothing co., ltd., the residence of no. 399 chengliu road, jiading district, shanghai.

the plaintiff gao hat co., ltd. v. the defendant bai x and li x equity disputes. after the case was accepted on november 12, 2008, the court formed a collegiate panel to conduct trials. on the day of the filing, the plaintiff applied for the addition of shanghai yubai clothing co., ltd. (hereinafter referred to as “yubai company”) as the third person in this case. on december 3, 2008, the court informed the third party, yubai company, to participate in the lawsuit. the court held a hearing on the court on april 13, 2010. the legal representative of the plaintiff, x and his entrusted agent, shen yongfeng, zhao deping, the defendant, bai x, li x, and the third party, yu bai’s co-authored agents, zhang zhiliang and shi jun, attended the proceedings. the case has now been tried.

the original teller said: at the beginning of 1997, the plaintiff assigned the manager of the company's management department, chen zhaoyu, to shanghai to handle investment projects, preparing for the establishment of a domestic-funded enterprise, shanghai yubai clothing industry co., ltd. and a foreign-funded enterprise, shanghai ruiguan garment co., ltd. (hereinafter referred to as “shanghai ruiguan company”) ), because chen zhaoyu and the defendant bai x are relatives, the defendant bai x became the first employee employed by the plaintiff. in order to meet business needs, chen zhaoxuan found his relatives, li x and bai x, as shareholders in the name of the two defendants, registered shanghai yubai clothing industry co., ltd., and later changed their name to shanghai yubai trading co., ltd. and shanghai company. the registration and start-up expenses of the above-mentioned domestic-funded enterprises were paid by the plaintiff. before registering the company, chen zhaoxuan and the two defendants verbally agreed that the two defendants were only nominal shareholders, the actual shareholders were plaintiffs, and the plaintiffs were responsible for capital contribution, management, investment income and risk responsibility. after the establishment of shanghai ruiguan company in september 1997, working with the aforementioned domestic companies, chen zhaoyu was the general manager of the two companies responsible for the overall business. the defendant bai x was the company's salesman, and bai x's father bai yun was the two companies. the financial supervisor, the defendant li x did not hold the company position. the plaintiff injected $50,000 in capital into yubo. since 2001, the legal representative of the plaintiff, x, has served as the general manager of the two companies. he actually managed yubo company as the actual controller, and made the company develop rapidly by acting as the french brand elle clothing business. in the face of the improvement of the company's operating conditions and the increase in profits, the defendant bai x and his father bai yun began to refuse to obey the plaintiff's instructions since december 2006, actually controlling yubo company, illegally occupying the company assets of the plaintiff's long-term investment operation. income. in order to protect their legitimate rights and interests, the court was originally asked to order: 1. confirm that the plaintiff enjoyed the entire equity of the third party yubai company; 2. require the two defendants and the third party to return the investment income of rmb 9 121 379.31, and mutual joint liability; 3. the litigation costs in this case are borne by the two defendants. on january 6, 2011, the plaintiff withdrew the second claim.

the defendant bai x, the defendant li x, and the third person yu bai company jointly pleaded that the two sides never agreed to a hidden investment. the original and the defendant were only brand-agent relationships, and the industrial and commercial registration materials and the company’s shareholder register did not appear. first name. during the pre-operation period of yubai company, the defendant bai x asked chen zhaoxuan for his respect for the elders. later, the correspondence with the legal representative of the plaintiff, x, was only for the peers. as the shareholder of the third party, the two defendants have already fully invested in the company's registration, and they have enjoyed the rights of shareholders according to law. at the same time, they also assumed the investment risk. therefore, the court requested the court to reject the plaintiff's claim.

the plaintiff provided evidence to prove his claim as follows: group 1: evidence 1 the plaintiff company registration data, etc., to prove the legal qualification of the plaintiff's main body and the use of the plaintiff's e-mail and telephone fax number; certified payment voucher to prove that the plaintiff invested 50,000 us dollars in yubai company; evidence 3 liquidity income and expenditure statement in june 2000, evidence 4 liquidity income and expenditure statement in july 2000, evidence 5 liquidity income and expenditure statement in 2000 in august, it was proved that the plaintiff invested 50,000 us dollars in yubai company and bai x and bai yun were employees employed by the plaintiff; evidence 6 monthly expenditure record of the plaintiff's financial expenditure to prove that the plaintiff invested 50,000 us dollars in yubai company; evidence 7-12 are the accounting statements of yubai company in 2001, 2002, 2003, 2004, 2005, and january-november 2006. the evidences 13-15 are yubai company 2004, 2005, 2006 respectively. annual corporate legal person annual inspection report to prove the assets of yubai company; evidence 16 yubai company establishment registration application, evidence 17 yubai company charter, evidence 18 enterprise legal person change registration application, to prove qualification yu bogong division. the second group: evidence 19 fund flow table march, april, may, 2000 to prove the funds of yubai company; evidence 20 business cards, to prove that yubai company and shanghai ruiguan company co-operate, jointly operate, both he is a subsidiary of the plaintiff. the defendant, bai x, served as the company's chief, business manager and manager. he was led by chen zhaojun, the general manager of shanghai appointed by the plaintiff; the evidence 21 seal record form, to prove that the seal was managed by the plaintiff, and the plaintiff actually operated yubo company. evidence 22 photos to prove that yu bai company is a subsidiary of the plaintiff; evidence 23 recording discs and text finishing materials to prove that the two defendants are only nominal shareholders; evidence 24 bai x to x x birthday congratulations letter to prove from 1997 by 2006, yubai company had been in the actual management control of the plaintiff; evidence 25 employees turned to the application form to prove that yubai company was actually operated and managed by the plaintiff. the third group: evidence 26-107, mainly a series of cypress x, baiyun to 阙x's request for report documents, request for payment, employee transfer application, etc., the evidence used to prove that the plaintiff is the owner of yubo company and the actual controller. during the trial, the plaintiff withdrew the evidence with the number 77. the fourth group: evidence 108-620, mainly a series of salary and bonus payment forms, various bill invoices, payment vouchers, travel expense reimbursement orders, receipt receipts, air tickets, express orders and other evidence, the evidence used to prove cypress x and baiyun are the employees of the plaintiff. the operating expenses of yubai company are all from shanghai ruiguan company. during the trial, the plaintiff withdrew the evidence numbered 523, 527 and confirmed that the evidence 410 was duplicated with the evidence 408. the evidence 408 shall prevail.

the defendant bai x, li x and the third person yu bai company questioned the evidence of the plaintiff as follows: there is no objection to the authenticity of the evidence 1 and 2 in the first group, but it is considered that the evidence 1 certificate has been made for a long time and cannot prove the current situation. evidence 2 has no relevance to the case; the authenticity of evidence 3 and 5 has no objection, but it is considered that the plaintiff’s purpose cannot be proved; evidence 4 has no originals and is not confirmed; evidence 6 is the plaintiff’s unilateral production and is not confirmed; evidence 7- the fax of 12 can not prove fax to the defendant and will not be confirmed; the authenticity of evidence 13-15 has no objection, and the defendant’s signature on it just proves that the defendant is the company’s shareholder; the authenticity of evidence 16 has no objection, but the company’s original registration the name is shanghai yubai industrial co., ltd., and the original case is called shanghai company; the authenticity of the evidence 17, 18 is confirmed, which can prove that the company was established by the defendant as a shareholder. the second group: evidence flow in march, may, the flow of funds, that no original can not confirm its authenticity, and the fund flow table in april, although the original, but no signature, can not confirm its authenticity; evidence 20-22 there is no objection to the authenticity, but the purpose of the disapproval of the plaintiff can only prove the total distribution relationship between the plaintiff and the third person on the elle brand; the authenticity of the evidence 24 has no objection, but the time is not april 2007, but after the order meeting from may 25 to may 29, 2007, and only the plaintiff and the third party can be consulted on the total brand distribution relationship, the final negotiation is fruitless; the authenticity of the evidence 25 has no objection, but the defendant bai x it is for the respect of the plaintiff 阙x; the evidence 26 is a fax, and it is impossible to verify its authenticity and will not be confirmed. the third group: the authenticity of the evidence 27, 66, 72, 98 is confirmed. the evidence 97 only confirms the content of the page signed by the defendant's personnel, but believes that the above evidence cannot prove the purpose of the plaintiff, but only the original, the defendant and the first communication between the three persons on brand agency status; for the rest of the evidence in the group