If the nominee shareholder is in debt, can the equity registered in their name be subject to compulsory enforcement?
Yes. Industrial and commercial registration has public notice effect, and a creditor’s application for compulsory enforcement against the equity registered in the name of the recorded shareholder is lawful. A hidden shareholder’s objection to the enforcement is unlikely to succeed—this is the most dangerous risk of nominee shareholding and must be assessed before signing any such arrangement.
Source article: Who Loses When Nominee Shareholding Goes Wrong? Conditions, Risks, and Self-Help for a Hidden Shareholder’s Registration as a Shareholder of Record | Lawyer Kevin Jun Lin
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