Being a nominal shareholder without actually owning equity

There is no cost involved. If someone asks you to “lend your ID to register as a shareholder” or “hold shares under your name temporarily,” you should decline every time.

As a registered shareholder, you are recognized as a legal shareholder. You must pay the full amount of subscribed registered capital by the deadline specified in the articles of association; otherwise, you must not only make up the payment but also compensate the company for any resulting losses. If other shareholders fail to contribute their share of the capital at the time of company formation, they share joint liability for covering that shortfall. When the company cannot repay debts when due, creditors may demand immediate payment of any amounts still pending under the subscription agreement. Even though someone else actually runs the business, all debts are recorded under your name. (National data, effective July 2024)

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；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）；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

Between a nominee shareholder and the actual investor, the nominee agreement is valid as long as there are no circumstances that render it invalid. However, if the actual investor wishes to register their name, the consent of more than half of the other shareholders is required. If the nominee sells or pledges the equity, the court will handle it according to the principle of 'bona fide acquisition' under the Civil Code. If the buyer was unaware of the arrangement, the price was reasonable, and the registration has been completed, the actual investor cannot reclaim the equity and can only seek compensation from the nominee. Regarding this judicial interpretation, a draft for comments on a new interpretation was released in 2025 year 9 month; once the final version is implemented, the entire document will be repealed, and the 2020 year amended version, which remains effective as of 2026 year 9 month, shall prevail. For the risks associated with being a nominee legal representative, see Section 8, Article 28.