The litigability of legal representative to remove registration | enterprise risk control
According to Article 13 of the Company Law, the legal representative of the company shall be the chairman, executive director or manager in accordance with the articles of association of the Company, and shall be registered according to law. If the legal representative of the company is changed, the change shall be registered. According to Article 30 of the Regulations on the Administration of Company Registration of the People's Republic of China, where a company changes its legal representative, it shall apply for registration of the change within 30 days from the date on which the change resolution or decision is made. It can be seen that the change of the company's legal representative should be registered with the registration authority in accordance with specific procedures. In reality, there are often various reasons that cause natural persons to empty the name of the legal representative and have no substantive connection with the company, or although there is an actual connection, it is urgent to remove the registration of the legal representative, which will produce the corresponding disputes. In practice, there are different views on whether the dispute of the registration of the legal representative should be accepted by the court, which is analyzed in this paper.
一、Theory of denial
The court holding a negative view usually holds that the removal of the legal representative is an internal matter of the company, whether it is the appointment and removal of the legal representative, or the generation of executive directors and managers, all come from the provisions of the company's articles of association, which belongs to the scope of the company's autonomy, and the judiciary cannot forcibly intervene.
For example, the Beijing Higher People's Court (2020) Jingminshen 4438 retrial review civil ruling held that Lu Mou requested to cancel the registration of his registration as a non-legal representative of a company, according to the relevant provisions on changing the legal representative and executive director stipulated in the articles of association of a non-company. Whether Lu serves as the manager, executive director and legal representative of a non-certain company is an autonomous matter of the company, and the non-certain company shall, after making the decision to change the manager, executive director and legal representative, go through the corresponding change registration formalities with the industrial and commercial administration department. Therefore, the original trial court found that the above-mentioned matters sued by Lu Mou did not belong to the scope of civil litigation that the people's court should accept under the subject matter of the case, and accordingly ruled to reject his lawsuit, which was not improper.
For another example, Shanghai Qingpu District People's Court (2019) Shanghai 0118 Civil ruling No. 12664 held that the legal representative of the company is a person who exercises functions and powers on behalf of the legal person according to the law or the articles of association. The plaintiff serves as the executive director and manager of the defendant company, and is also the legal representative of the defendant company. The appointment and removal of the legal representative, as well as the creation of the executive director and manager, all come from the provisions of the articles of association of the Defendant company, which belong to the internal autonomy of the company, and the judicial power should not be excessively involved. Therefore, the plaintiff's request for the court to order the defendant to remove the plaintiff's position as the defendant's legal representative has no legal basis, nor does it belong to the scope of the people's court to accept civil litigation, and should be rejected.
Although the above view maintains the relative independence and cautious attitude of the judiciary to the autonomy of the company, in view of the fact that the judiciary is the last line of defense for the relief of rights, the situation of the named legal representative is very complicated and the reasons are different, if it is not accepted at the acceptance stage, it would be a blanket mistake. Therefore, the Supreme People's Court made the contrary determination in the ruling No. 88 of the Supreme Law (2020), which is also the reference case of the Sixth Circuit Court of the Supreme People's Court in 2020.
二、Positive theory
The court holding a positive view usually holds that the relationship between the company and the legal representative is entrusted, and it is a civil dispute between equal civil subjects, and the people's court should protect the parties' right to Sue in accordance with the law.
From the above point of view, the more representative and authoritative case in practice is the Supreme People's Court (2020) Most High Law Minzai 88 Retrial review civil ruling, the court held that:
On the question of whether the lawsuit request of Wang Mou to order a company and Cao Mou to change the business registration of the company's legal representative should be accepted. Wang's claim is based on the fact that he has left the company, requesting the termination of the appointment relationship between him and the legal representative of a company and the registration of the change of legal representative. The dispute is a civil dispute between equal subjects. According to Wang, he has resigned from Sai A company since May 30, 2011, and it has been nearly 9 years, which shows that Sai a company has no intention to handle the change of legal representative registration on its own. Because Wang is not a shareholder of a company, it is also unable to make a resolution on the change of legal representative after consultation through corporate autonomy channels such as convening shareholders' meetings. If the people's court does not accept Wang Mou's lawsuit, the legal risk that Wang Mou thus bears will continue to exist without any remedy. Therefore, the court held that Wang Mou had an interest in litigation over a company's lawsuit request for registration of legal representative change, and the dispute was a civil dispute between equal subjects, which belonged to the scope of civil litigation accepted by the people's Court. First, the court of second instance ruled not to accept the lawsuit request of Wang Mou, the application of law is wrong, the court will correct.
Accordingly, the justiciability of accepting the registration of the legal representative after the case has been the mainstream view. Of course, in the civil ruling of the Supreme Law Minzaire-88 retrial review in (2020), the court also held that: "Acceptance is accepted, but whether to support the elimination of the legal representative still needs one case and one discussion", that is, whether the legal representative's lawsuit request has factual and legal basis, and whether it should be supported, should be judged through the entity trial. The opinions of the court on the trial of the registration of the legal representative will be analyzed in the subsequent series of articles on enterprise risk control.