From Sanitizer Profits to Family Feuds: How Carl’s Get-Rich-Quick Scheme Spiraled into a Saga of Icelandic Proportions

 

 

Law In A Minute

 The transfer is deemed valid.

Pursuant to the relevant law, specifically 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), Article 25, it is stipulated that if a nominee shareholder transfers, pledges, or otherwise disposes of the equity registered in their name, and the actual shareholder requests that the disposition of said equity be declared invalid, such a request may not be upheld if the transferee has acted in good faith and was unaware of the existence of the actual shareholder. In this instance, since the company was registered under Jack’s name, the buyer’s acquisition of the equity is protected.

In light of the substantial losses caused to Carl, he may seek full compensation from Jack.

Lastly, it is indeed permissible for foreign nationals to establish a company in China, either independently or in collaboration with a Chinese partner. Should you wish to proceed with opening a company, please do not hesitate to contact me. I will provide comprehensive guidance throughout the process.

 

 Legal Basis

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), Article 25**:

If a nominee shareholder transfers, pledges, or otherwise disposes of the equity registered in their name, and the actual investor requests that the disposition of the equity is invalid on the grounds that they hold the actual rights to the equity, the people’s court may refer to Article 106 of the Property Law in addressing the issue.

Where the disposition of equity by a nominee shareholder results in losses to the actual investor, and the actual investor seeks to hold the nominee shareholder liable for compensation, the people’s court shall support such a claim.