Improperly listed shareholders: never hold shares on someone else’s behalf

Cost: Zero expense. If someone asks you to “lend your ID to be listed as a shareholder” or “hold shares under your name temporarily,” always decline.
In plain terms: Once your name is registered, you are legally a shareholder. You must pay the full amount of your subscribed registered capital by the deadline; failure to do so results in both payment and compensation for any company losses. If other shareholders fail to contribute their share during company formation, you are liable for that shortfall as well. While others run the business, all debts remain tied to you.
Benefit: Being officially listed makes you a legal shareholder. You must pay the full subscribed registered capital by the deadline set in the articles of incorporation; otherwise, you must pay the owed amount plus compensate the company for losses. If other shareholders fail to contribute during formation, they share joint liability for that deficit. When the company cannot meet its debts, creditors may demand immediate payment of any amounts not yet due. While the actual operators stay off the records, all obligations remain your responsibility (nationwide, effective July 2024).
Evidence grade: A
Sources: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
Notes: A proxy agreement between a nominal shareholder and the true investor remains valid unless specific invalidity criteria apply. However, the true investor can only replace the listed name with consent from over half of all shareholders. If the nominal holder sells or pledges those shares, courts apply the Civil Code’s rules on good-faith acquisition; consequently, the investor cannot reclaim the shares if the buyer acted in good faith, paid a fair price, and completed registration, and must seek compensation solely from the nominal holder. A draft revision to this judicial interpretation was released in September 2025; once finalized and implemented, it will replace the current version, currently the 2020 amendment still valid as of September 2026. Risks associated with serving as a nominal legal representative are discussed in Section 8, Article 28.