[Direct answer]In the Beijing area, it is necessary to first determine whether the arrangement is indeed invalid, and then discuss the follow-up actions. Generally, the nominal shareholder and the actual investor's agency agreement is valid between the two parties, and the ownership of the investment rights is determined according to the agreement and the actual investor's identification; but if the purpose of the agency is to evade the mandatory provisions of laws and regulations (such as restrictions on specific finance, foreign investment access, and civil servants engaging in business), or to conceal illegal purposes in a legal form, it may be deemed invalid according to Articles 146 and 151 of the Civil Code of the People's Republic of China. After the agreement is deemed invalid, according to Article 157, the property obtained by the actor through such actions shall be returned; if it cannot be returned or there is no need to return it, compensation in the form of a discounted price shall be made; and the party at fault shall compensate the other party for the losses suffered thereby. If all parties are at fault, they shall bear corresponding responsibilities respectively. It should be noted that the invalidity of the agency does not mean that the actual investor automatically obtains shareholder status. It is still necessary to claim according to the procedures stipulated in the Company Law and the company's articles of association.

I. Problem Background and Typical Scenarios

Stock ownership proxy is very common in investment, financing, and equity incentives. Once a dispute arises, the nominal shareholders and actual investors often compete with each other. Some proxy arrangements are deemed invalid due to evading supervision, leaving investors worried that they will "lose both the money and the equity". In corporate litigation in Beijing, the handling of the validity of stock ownership proxy and the consequences of its invalidation is a key and difficult issue in investment disputes.

II. Key points of dispute

First, whether the agency holding agreement is valid. Second, the criteria for determining its invalidity. Third, the disposition of the property after it is deemed invalid. Fourth, whether it can be used to confirm the shareholder's status.

III. Professional analysis by Henglue Lawyers

The first layer: Generally effective. The nominee holding agreement is usually effective between the parties, and the actual investor can claim investment rights according to the agreement. If the nominal shareholder disposes of the equity, it may constitute a breach of contract. Most disputes focus on the specific application of the new Company Law and relevant judicial interpretations. The second layer: Invalid situations. If the nominee holding is used to evade mandatory legal provisions or violate public order and good customs, it may be invalid, such as using nominee holding to evade industry access and shareholding restrictions. When judging, we should not only look at the surface content of the agreement, but also at the true purpose of the transaction. The third layer: Consequences of invalidity. After the agreement is invalid, it shall be handled according to the rules of returning property, compensating for losses, and making damages. The paid investment funds can usually be claimed for return. The treatment of the equity appreciation part needs to be determined according to the principles of fault and fairness. If both parties are at fault, the losses shall be shared according to their respective faults. The fourth layer: Shareholder qualification. The invalidity of nominee holding does not necessarily result in the confirmation of shareholder qualification. If the actual investor wants to be listed as a shareholder, he/she must still meet the conditions of shareholder qualification and the articles of association, as well as the attitude of other shareholders stipulated in the Company Law. If the rights of others have been legally obtained, only corresponding property rights can be claimed. In a dispute over equity transfer handled by our lawyers, the transferee argued that "the agreement is invalid because it is a nominee holding", but the agreement was confirmed valid by the effective judgment. The nominee holding defense failed to negate the validity of the agreement, indicating that such a defense needs to be supported by sufficient evidence. Related disputes can be resolved through legal means.Business and contract disputes in enterprisesOverall handling of the service.

IV. Practical suggestions and legal basis

The first step is to review the purpose, content, and performance of the nominee agreement to determine whether there are grounds for its invalidation. The second step is to secure investment certificates, dividend records, and decision-making participation records to prove the actual investment and investment rights. The third step is, if the agreement is deemed invalid, to claim the return of the investment funds and share the increase in value and losses based on fault. The fourth step is to assess whether the nominal shareholder meets the requirements for disclosure and, if necessary, to claim shareholder status in accordance with company law procedures. The fifth step is to take timely measures to prevent the nominal shareholder from disposing of the equity without authorization, and, if necessary, to apply for preservation and claim breach of contract or infringement liability. Main legal basis: Articles 146, 153, and 157 of the Civil Code of the People's Republic of China; the provisions on shareholder qualifications and equity transfer in the Company Law of the People's Republic of China (amended on December 29, 2023 and implemented on July 1, 2024); the relevant provisions on actual investors and nominal shareholders in the Interpretation of the Company Law by the Supreme People's Court (III); and specific applications shall be subject to the currently effective regulations.

5. Henglu Law Firm's Reminder

There are three key points regarding the invalidity of proxy holding: Generally, proxy holding is valid, and it is only invalid when it evades mandatory regulations or violates public order and good customs; after it is invalidated, it shall be handled in accordance with the principles of restitution, compensation for depreciation, and fault-based compensation. The invalidation does not automatically grant the shareholder status; investment certificates and performance records are crucial evidence, so it is necessary to guard against the nominal shareholders disposing of the equity without authorization. For disputes involving corporate commercial and contractual matters, you can seek legal assistance through the following channels:Business and contract disputes in enterprisesThe service provides a comprehensive solution, which can be combined with disputes over equity and investmentSpecial servicesThe plate, which involves execution and creditor recovery, can be referred to for reference.Creditor's rights and debts, and enforcementFor any inquiries regarding intellectual property and general legal services, please feel free to contact us through the column provided.Intellectual property and corporate lawTeam.

VI. Frequently Asked Questions

Q1: Is a shareholding nominee agreement necessarily valid?

Not necessarily. Generally, agency holding is effective between the two parties; if it is intended to evade mandatory legal provisions or violate public order and good customs, it may be deemed invalid.

Q2: Can I get my money back after it's been deemed invalid?

It can be claimed that the paid investment funds should be returned; if the compensation in the form of a discount cannot be returned or is not necessary to be returned, the parties shall share the losses according to their respective faults.

Q3: Can I directly confirm my shareholder status if the application is unsuccessful?

No. The invalidity of holding shares on behalf of others does not automatically result in the confirmation of shareholder status. It is still necessary to meet the conditions stipulated by the Company Law and the articles of association. Otherwise, one can only claim corresponding property rights and interests.

Q4: What should I do if the nominal shareholder sells the shares without authorization?

The party may claim breach of contract liability according to the agency agreement, claim infringement or apply for property preservation when necessary, and fix the evidence of its disposal actions in a timely manner.

Q5: What evidence should I prepare?

The power of attorney agreement, investment transfer certificates, dividend and decision-making participation records, and communication records are used to prove the actual investment and the ownership of investment rights.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglue Lawyers for specific situations.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.