Don't be a nominal shareholder, and don't hold equity on someone else's behalf

Cost

Free. If someone says "let me borrow your ID to list you as a shareholder" or "let the shares sit in your name for now," refuse every time.

What you get

A registered shareholder is legally a shareholder. You must pay in, in full, the money you promised, within the period set by the company's articles (paying in the subscribed capital in full). If you don't pay on schedule, you owe the company for its losses on top of paying it in. If some shareholder did not actually pay in money when the company was set up, the other shareholders at the time of setup share in repaying that gap (joint and several liability). When the company can't pay debts that are due, creditors can demand that money not yet due be paid in early. The person actually running the business is not on the register, yet the debts are recorded in your name (nationwide, from July 2024)

Notes

Between a nominal shareholder and the person who really put up the money, a holding agreement counts as long as none of the grounds for invalidity applies. But if the person who really put up the money wants to put their own name on the register, more than half of the other shareholders must agree. If the nominal shareholder sells or pledges the equity, the court handles it by reference to the Civil Code's rule on good-faith acquisition. If the buyer did not know, the price was reasonable and the transfer was registered, the person who put up the money cannot get the equity back and can only seek compensation from the nominal shareholder. For this judicial interpretation, a draft of a new interpretation was released for comment in September 2025, and once the final version takes effect the whole present one will be repealed. This item follows the 2020 revised version, which was still in force as of September 2026. For the risks of being the nominal legal representative, see §8.28.

Evidence grade

A : Specific numbers from meta-analyses, large cohorts or randomized trials; for law and policy, the statute or official text.

Sources

1. 全国人大常委会 (2023). 公司法（2023 年修订，第四十七、四十九、五十、五十四条）. https://www.gov.cn/yaowen/liebiao/202312/content_6923395.htm
2. 最高人民法院 (2020 修正). 关于适用《中华人民共和国公司法》若干问题的规定（三）（法释〔2011〕3 号，2014 年法释〔2014〕2 号、2020 年法释〔2020〕18 号两次修正，第二十四、二十五条）：「如无法律规定的无效情形，人民法院应当认定该合同有效」「实际出资人未经公司其他股东半数以上同意，请求公司变更股东……人民法院不予支持」「名义股东处分股权造成实际出资人损失，实际出资人请求名义股东承担赔偿责任的，人民法院应予支持」. https://flk.npc.gov.cn/detail?id=ff808181799def980179ac07a9ca117c（国家法律法规数据库）
3. 最高人民法院 (2025). 关于适用《中华人民共和国公司法》若干问题的解释（征求意见稿）第九十条. https://www.court.gov.cn/zixun/xiangqing/477881.html

Translated from the Chinese original. Original book, section 12, tip 4. This section describes legal rules, mostly mainland China’s. It is general information, not legal advice; for your own case, talk to a lawyer. Content may be out of date and rules differ by place. When you actually deal with an agency, a doctor or a court, follow what local officials, doctors and lawyers tell you. Disclaimer