1. If the internal governance of the company is dysfunctional, the judiciary can intervene conditionally

The court holding the above view usually holds that a company is a profit-making tool formed by shareholders based on autonomy of will, and it is a self-disciplined group. With the help of autonomy of shareholders, shareholders decide corporate affairs by themselves, supervise and manage themselves, and others generally have no right to interfere. However, when the company's internal self-regulation mechanism stagnates and fails, and the failure of the self-regulation mechanism cannot be recovered by itself, and there is evidence that the legitimate rights and interests of relevant parties are violated, the judiciary can intervene conditionally to restart the company's internal operation system.

For example, the Guangzhou Intermediate People's Court (2020) Yue 01 Min End 9854 civil judgment held that the election, appointment and registration of the company's legal representative belong to the scope of the company's internal governance, and under normal circumstances, as long as the corresponding election procedures meet the conditions stipulated by law, the judiciary should not be involved. However, when the internal governance of the company is dysfunctional, and there is evidence to prove that the interests of the relevant rights subjects have been infringed or there is a possibility of infringement, the judiciary can conditionally intervene and provide relief. In this case, according to the evidence submitted by Zhang, although the company has never refused to change the registration of its legal representative, since Zhang resigned in 2011 and was approved until the date of litigation between the two sides, the company has not fulfilled its promised obligation to change. In addition, from the effective ruling of another case submitted by Zhang mou, because a city company did not carry out the industrial and commercial change of legal representative, it directly affected the convenience of Zhang mou's credit investigation and daily life. Therefore, although the city company has no objection to cooperating with the implementation of the change registration, in view of the objective fact that it has failed to actually fulfill the change commitment, Zhang has the right to request the completion of the change registration procedures of the judicial representative of the city company by means of litigation.

2. The Company and the legal representative have both labor relationship and entrustment relationship. In terms of entrustment relationship, the agent has the right to terminate the entrustment relationship

From the perspective of the company law, the company appoints the chairman, executive director and manager to exercise the statutory functions and powers according to the provisions of the articles of association and the resolution of the shareholders' meeting, and the above personnel agree to take office and carry out the entrusted matters according to law, and the appointment relationship is formed between the company and them. The legal conduct of the two parties is actually the entrusted contract relationship, and the existence of labor relationship does not exclude the existence of labor relationship under certain circumstances. Since it is an entrustment contract, according to Article 933 of the Civil Code, the principal or the agent may rescind the entrustment contract at any time.

For example, Shenzhen Qianhai Cooperation Zone People's Court (2021) Yue0391 Civil judgment No. 1618 at the beginning of the Republic of China held that the plaintiff submitted the labor contract and two certificates issued by the defendant to prove that the defendant hired the plaintiff to serve as the legal representative, general manager and fund manager of the defendant company from March 1, 2018 to January 28, 2019. From the legal relationship analysis, the plaintiff and the defendant not only established a labor relationship, but also established a contract relationship, the plaintiff accepted the defendant's entrustment as the legal representative of the company. The plaintiff resigned from the defendant's office on December 31, 2018, and went through the separation formalities. The labor relationship between the original and the defendant has been terminated as of January 1, 2019, and the plaintiff has the right to terminate the above entrusted contract relationship between the two parties; The plaintiff has clearly stated that it is not willing to continue to serve as the legal representative of the defendant company, and through litigation channels to change its identity as the legal representative of the defendant, there are facts and legal basis, the court supports.

3. The legal representative and the company need to have a substantial relationship

The company is a legal person, the company needs to have a natural person as a representative, that is, the legal representative. The characteristics of the legal representative are: (1) The legal representative is a natural person determined by the constitution of the legal person. (2) The legal representative of a legal person has the right to engage in civil activities on behalf of the legal person. (3) The legal representative of a legal person is the principal person in charge of the legal person. In civil proceedings, the legal representative shall represent the legal person in the court and respond to the suit. If the legal representative has no substantial connection with the company, it should not act as an external representative.

For example, the judgment No. 9822 of Shanghai Chongming District People's Court (2019) Shanghai 0151 at the beginning of the People's Republic of China held that legal persons are fictitious personalities in nature, and their external civil activities are mainly carried out through their legal representatives, which requires that there is a substantial connection between the legal representative and the legal person they represent, and a person who has no substantial connection with the company. Cannot and should not be the legal representative of the company. China's Company Law stipulates that the legal representative of a company shall be the chairman, executive director or manager in accordance with the provisions of the articles of association. In this case, Sun, as the executive director and legal representative of a German company that does not own any shares, resigned from the defendant's office on September 18, 2012, and went through the work withdrawal procedures on January 29, 2013. He has no actual connection with a German company, and Sun and a German company once appealed to the court for disputes over labor contracts. If he continues to serve as the legal representative of the company, it goes against the original intention and intent of the legislation.

4. Principles of voluntariness and good faith

Some of the court's supporting views return to the basic principles of civil law, the "voluntariness principle" and the "good faith principle", in conjunction with the situation where the party has exhausted the internal remedies, supporting the request for cancellation registration.

For example, Shenzhen Qianhai Cooperation Zone People's Court (2017) Yue 0391 Civil judgment No. 2954 in the beginning of the Republic of China held that civil subjects engaged in civil activities should follow the principle of voluntary. Therefore, the plaintiff has the right to choose whether to continue to act as the legal representative of the Company or not after the expiration of the term. After the expiration of the term of office, the plaintiff has repeatedly expressed to the shareholders' meeting and the board of directors that he is no longer the company's legal representative and other executive positions, and has proposed twice in August and September 2017 to hold a shareholders' meeting and the board of directors to conduct a new election in accordance with the provisions of the company law, although there are minority shareholders Tan Mou and Guan mou expressed support, but because the major shareholders accused Love a culture company refused to attend the meeting could not be held. In the case of no external problems of the company, the negative actions of the defendant, Qianhai Ai Bi Company and the major shareholder Ai Bi Culture Company, are suspected of forcing the plaintiff to continue to perform his duties in a disguised manner, which violates the above-mentioned voluntary principle of civil law. In addition, in the face of court investigation, the defendant Qianhai Aibi Company and the major shareholder Aibi Culture Company refused to state to the court the real reasons for disagreeing with the plaintiff's resignation, and the defendant's negative behavior should be found to violate the principle of civil law honesty and credit.

Article 3 (2) of the Provisions of the Supreme People's Court on Restricting the High Consumption of Persons subject to Enforcement in 2015 stipulates that, if the persons subject to enforcement are units, after measures to restrict consumption are taken, the persons subject to enforcement and their legal representatives, principal responsible persons, persons directly responsible for affecting the performance of debts, and actual controlling persons may be restricted from high consumption. As a result, the legal representative of individual enterprises will change the legal representative after the enterprise loses the lawsuit to avoid the "height limit" measure, and even solve the "height limit" dilemma through litigation. The courts tend to take a strict grip on such proceedings that remove the registration of legal representatives.

1. Although the employee status of the company has been removed, the above behavior belongs to the internal management affairs of the company or the establishment of labor relations, which does not mean that the identity of the director and legal representative can be removed naturally, such as: Shanghai First Intermediate People's Court (2020) Hu01 Minend 4022 civil judgment of second instance.

2. If the legal representative is a director, in accordance with the provisions of paragraph 2 of Article 45 of the Company Law of the People's Republic of China, and the director is not re-elected in time after the expiration of his term of office, the original director shall continue to perform his duties as a director in accordance with the provisions of laws, administrative regulations and the articles of association of the Company before the newly elected director takes office. Since the directorship is still in place, it is not appropriate to remove the legal representative.

3.The name is not the reason for the cancellation of registration, adults with civil capacity should be responsible for the risk caused by their own behavior, and the other party malicious evasion or negative treatment, such as losses, can claim damages. For example, the Shanghai First Intermediate People's Court (2021) Hu01 Minend 7912 civil judgment believes that even if Sun is only a nominal executive director and legal representative and does not actually participate in the operation and management of a Ming company, but this does not become the reason why he has the right to claim the registration of the legal representative. Sun is an adult with full capacity for civil conduct, and he should be responsible for the risk caused by his own behavior. In fact, Sun was in full agreement with his position at that time. Sun is because a company is subject to legal sanctions and then makes it enter the list of persons subject to enforcement for dishonesty as a legal representative, and sues to remove the registration of the legal representative. At present, in the case that the term of office of the executive director has expired, Sun shall request the shareholders of a company to elect a new executive director as soon as possible and the executive director shall act as the legal representative in accordance with the provisions of the articles of association of the company. If the shareholder maliciously evades or treats Sun Jinshou's request negatively, and causes actual losses to Sun, Sun may claim compensation.

The legal representative is the person who realizes the will of the enterprise legal person, and a sound and complete legal representative system is an important aspect of the compliance management of enterprises. Hillhouse Law Firm will give full play to its professional advantages and effectively help enterprises to prevent relevant legal risks. We will also provide enterprises with more forms and more abundant legal service projects according to the development of the industry and the actual situation of enterprises, and guide enterprises to make scientific decisions and standardize development.