Business China

Responsibilities of a China Company's Legal Representative

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First, what is the legal definition of China company's legal representative?

The legal representative refers to the person who is responsible or acting on behalf of corporations in accordance with the law or the articles of association.

The law of China adopts the single legal representative system. In other words, there is only one legal representative in one company. The company’s chairman, executive director or general manager can take up the role according to the article 13 of company law.

Second, who can be the legal representative?

To encourages and strengthens the business vigor of the company, The China law no longer interferes the internal management of enterprises and leaves it to the company to stipulate who is the legal representative of the company in accordance with the latest company law. Therefore, the legal representative of the company is expressly agreed in the articles of association.

[Article 13 of company law: the legal representative of the company shall, in accordance with the provisions of the articles of association, be held by the chairman, the executive director or the manager, and shall be registered according to law. If the company's legal representative changes, it shall apply for registration of change.]

Third, the Civil liability of the legal representative.

If a citizen or legal body violates a contract or fails to perform other obligations, he shall bear civil liability. In general cases, the legal representative represents the legal body (corporation), thus the resulting civil responsibility shall be borne by the company/company.

The legal representative does not bear the civil liability directly to the third party. The legal representative is only responsible for the civil liability arising out of the fault of his own.

The legal representative shall be responsible for the personal legal responsibility of the legal representative in addition to the corporation liability of the legal body, which is divided into the following categories.

The legal representative shall be liable for civil compensation for the operation of the fault.

According to the article 150 of company law: "the directors, supervisors and senior management personnel shall be liable for compensation in performing company duties in violation of the provisions of the laws, administrative regulations or the articles of association."

Therefore, the legal representative may indemnify the company for the loss caused by the legal representative intentionally or negligently.

The legal representative shall be liable for the civil tort liability which may be borne by the property of the unit.

Article 106 of the general principles of the civil law stipulates that citizens and legal persons shall bear civil liability if they infringe upon the property or personal property of other persons by virtue of the infringement upon the property of the state.

Civil sanctions for illegal ACTS - fines, detention.

(1) Engaging in illegal operations beyond the scope of business approved and registered by the registration authority;
(2) concealing facts from the registration authority or tax authorities and resorting to deception;
(3) withdrawing funds or hiding property to evade debts;
(4) disposing of property without authorization after being dissolved, revoked or declared bankrupt;
(5) failing to apply for registration and announcement in a timely manner when changing or terminating, so that the interested party suffers significant losses;
(6) engaging in other activities prohibited by law, harming the interests of the state or the public interest.

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