What is equity custody?

Legal analysis: the full name of equity trust is the entrusted management of equity, which is a kind of entrusted relationship in law. The so-called' entrustment relationship' refers to the legal relationship in which both parties agree that the trustee will handle affairs in the name of the entrusting party and bear the expenses. The entrustment relationship is established by concluding an entrustment contract. The agent handles the entrusted affairs in the name of the principal within the scope of entrustment, and has a civil legal relationship with a third party, and the consequences are directly borne by the principal. The acts carried out by the trustee within the scope of authorization are equivalent to the principal's own acts; The expenses incurred by the trustee in handling the entrusted affairs shall also be borne by the principal.

Legal basis: People's Republic of China (PRC) Company Law.

Article 20 Shareholders of a company shall abide by laws, administrative regulations and the articles of association, exercise their rights according to law, and shall not abuse their rights to harm the interests of the company or other shareholders; The company's independent legal person status and the limited liability of shareholders shall not be abused to harm the interests of the company's creditors. Shareholders of a company who abuse their rights and cause losses to the company or other shareholders shall be liable for compensation according to law. Shareholders of a company who abuse the independent status of a company as a legal person and the limited liability of shareholders to evade debts and seriously damage the interests of creditors of the company shall be jointly and severally liable for the debts of the company.

Article 21 The controlling shareholders, actual controllers, directors, supervisors and senior managers of a company shall not use their related relationships to harm the interests of the company. Anyone who violates the provisions of the preceding paragraph and causes losses to the company shall be liable for compensation.

Article 22 The resolutions of the shareholders' meeting, the shareholders' meeting and the board of directors of the company are invalid if they violate laws and administrative regulations. If the convening procedure and voting method of the shareholders' meeting, shareholders' general meeting or the board of directors violate laws, administrative regulations or the articles of association, or the contents of the resolution violate the articles of association, the shareholders may request the people's court to cancel it within 60 days from the date of making the resolution. Where a shareholder brings a lawsuit in accordance with the provisions of the preceding paragraph, the people's court may, at the request of the company, require the shareholder to provide corresponding guarantees. If the company has gone through the registration of change according to the resolution of the shareholders' meeting or the shareholders' meeting or the board of directors, after the people's court declares the resolution invalid or cancels the resolution, the company shall apply to the company registration authority for cancellation of the registration of change.