Abstract: When the Companies Act is about to be revised for the sixth time,clarifying the legal nature and effect of the holding of shares on behalf of others will help to realize the dynamic balance and the same frequency resonance between the encouragement of investment and the maintenance of transaction security.In view of the Trust Laws recognition of the independence of the trust property and the strictness of the trust obligation,unless there is a special agreement between the dormant shareholders and the nominal shareholders,the trust relationship should be used to explain and sort out the equity holding relationship.We should fully respect and effectively protect the effectiveness of equity holding on behalf of others based on the modern concept of rule of law that “it can be done without prohibition”.The effectiveness of the relationship includes two dimensions:internal and external.In terms of internal relations,we should vigorously promote the spirit of contract and trust culture,and comprehensively consolidate a series of rights of dormant shareholders,such as the right to know,the right to profit,the right to adjust the equity exercise strategy,the right to cancel the equity disposal,the right to remove the nominal shareholders,the right to participate in governance and the right to manifest.As far as external relations are concerned,externalism is the basic principle to resolve the conflict of rights between dormant shareholders and bona fide third party.The system of bona fide acquisition is applicable to the situation of holding shares on behalf of others,which helps to maintain the security of transactions and improve the liquidity of shares.In the process of enforcement,dormant shareholders should also yield to the bona fide creditors rights of nominal shareholders.If the creditor of the nominal shareholder knows or should know the relationship between the nominal shareholder and the dormant shareholder,the principle of externalism is not applicable.In order to respect the autonomy of the parties,we should adopt the value orientation of “the principle is effective,the exception is invalid” for the validity of the stock rights.In order to strictly limit the scope of invalid equity holding agreement,it is suggested to introduce “three-step” thinking and accurately identify the validity norms.The referee should be more cautious when invoking “public order and good custom” to confirm the invalidity of holding shares on behalf of Others.

Key words: holding stock rights on behalf of others, equity trust, beneficiary shareholder, nominal shareholder, creditor, externalism