I. Legal risk and control in the production process

1. Production safety management is not in place

Enterprises do not pay enough attention to safety production, safety production facilities or production conditions are not up to standard, and there is no effective safety supervision, which will lead to safety accidents in the production process. In this way, enterprises need to bear civil liability for casualties, but also need to bear the punishment of the administrative department, and even need to bear criminal responsibility according to the severity of the circumstances. In addition, Article 9 of the Regulations on the Reporting and Investigation of Production Safety Accidents provides that: after the occurrence of an accident, if a production safety accident fails to report in time or conceals that it does not report, it will bear the corresponding administrative and criminal responsibilities.

2. Failure to comply with discharge standards

If an enterprise does not comply with the discharge standards during the operation of the production equipment and discharges waste water and waste gas in violation of the regulations, causing damage to the environment, the enterprise will be punished by the administrative department, or may be sued to the court as an infringer or a litigant in a public interest lawsuit, and then bear civil liability, and may also bear criminal liability according to the severity of the circumstances.

3. The quality of the products is not up to standard

According to the provisions of the Product Quality Law, if the product defect causes damage to the person or property of others, the producer shall be liable for compensation. Where the defect of the product causes personal injury to the victim, the infringer shall compensate for medical expenses, nursing expenses during the treatment period, income reduced due to missed work and other expenses; If the disability is caused, it shall also pay expenses such as the cost of self-help equipment for the disabled, the cost of living allowances, the compensation for disability and the necessary living expenses of the persons who are supported by the disabled; If it causes the death of the victim, it shall also pay such expenses as funeral expenses, death compensation and living expenses necessary for the persons who were supported by the deceased before his death. If an enterprise produces food that does not meet food safety standards, according to the provisions of the Food Safety Law, the enterprise shall pay additional compensation of ten times the price or three times the loss in addition to compensation for conventional losses.

4. Engaging in production activities without permission

A production license is a certificate legally granted by the state to an enterprise that has the production conditions of a certain product and can guarantee the quality of the product. According to the provisions of the Food Safety Law, if anyone engages in food production or marketing activities without permission, or produces food additives without permission, the competent authorities will confiscate the illegal gains, the food produced or marketing illegally, the food additives and the tools, equipment, raw materials and other articles used for illegal production or marketing, and impose a fine. According to the Regulations of the People's Republic of China on the Administration of Production Licenses for Industrial Products, where an enterprise does not apply for a production license in accordance with the provisions and produces products listed in the catalogue without authorization, the competent department of production licenses for industrial products shall order it to stop production, confiscate the products illegally produced, impose a fine, and investigate criminal responsibility according to law if it constitutes a crime.

5. External risks that production enterprises may face

In the production process, a production enterprise may need to establish contracting business with a third party for drainage, production machine maintenance, testing, etc. If the enterprise does not sign the contracting contract with a clear right and responsibility with a third party, once the accident occurs due to the direct operation of the contract is not signed or the contract is not standardized, the enterprise may face avoidable external risks.

2. Legal risk and control in the sales process

1. The products sold are not legally approved

The products sold by enterprises generally need to be legally approved, and some products even need to be specially approved or licensed, otherwise they need to take responsibility, such as: Article 26 of the Regulations on Cosmetic Hygiene Supervision stipulates that those who sell imported cosmetics without approval or inspection shall confiscate the products and illegal income, and may be fined three to five times the illegal income. Article 8 of the Measures for the Supervision and Administration of Online Drug Sales stipulates that online drug sellers shall not sell drugs to individual consumers if they are drug manufacturers or drug wholesale enterprises. Where a drug online seller is a drug retail chain enterprise, it shall not sell prescription drugs or drugs that the State has special management requirements through the Internet. If an enterprise sells products that require special approval or license, but the enterprise has not yet obtained the approval or license, its sales behavior will be subject to administrative penalties, and may even bear criminal responsibility depending on the severity of the circumstances.

2. The selected agent or distributor does not achieve the expected purpose

At present, many enterprises choose agents or dealers to sell products. If there is a mistake in the selection of agents or dealers, there may be business risks such as insufficient ability of agents or dealers, inability to coordinate or even malicious competition between agents or dealers, and disruption of market prices. If agents or dealers lose their qualifications, illegal agents or distribution, the resulting legal risks may need to be borne by the enterprise.

3. The quality of the products sold does not meet the requirements

According to Article 5 of the Product Quality Law, it is prohibited to forge or falsely use certification marks and other quality marks; It is prohibited to forge the origin of a product, forge or falsely use another person's factory name or address; It is prohibited to adulterate or adulterate the products produced or sold, pass them off as genuine or shoddy. Otherwise, they shall, in accordance with Article 53 of the Product Quality Law, be ordered to make corrections, the products illegally produced or sold shall be confiscated, and a fine of less than the equivalent value of the products illegally produced or sold shall be imposed; If there are any illegal gains, the illegal gains shall be confiscated concurrently; If the circumstances are serious, the business license shall be revoked.

4. Illegal pricing or unfair pricing behavior in the sales process

In the process of selling or providing services, an enterprise shall, in accordance with the provisions of the competent pricing department of the government, clearly mark the price of the commodity, indicating the name of the commodity, the place of origin, the specification, the grade, the unit of valuation, the price or the item of service, the standard of charge and other relevant information. Where commodity prices or service prices meet the conditions of Article 18 of the Price Law of the People's Republic of China, government-guided prices or government-set prices shall apply. According to the provisions of Article 40 of the Price Law of the People's Republic of China, an enterprise that conducts improper pricing acts shall be ordered to make corrections, its illegal gains shall be confiscated, and a fine may be imposed concurrently; if the circumstances are serious, it shall be ordered to suspend business for rectification, or its business license shall be revoked by the administrative department for industry and commerce.

5. Distributors and customers do not pay in time

Among sales customers, there may be legal risks of default by distributors and customers. Distributors, customers do not pay in time, affect the production and management progress of enterprises, will cause economic losses to enterprises. Therefore, when the enterprise signs the distribution contract or sales contract, it should clarify the contract pricing and the payment method, and clearly stipulate the liability for breach of contract. In appropriate cases, it can establish a guarantee system for distributors and customers to enhance the payment pressure and motivation by allowing distributors and customers to provide appropriate guarantees. In particular, do not sign a distributor authorization contract without a fixed period, even if trust, it is also recommended to set a certain period, after the period of authorization, a separate letter signed in person, this method has a certain effect on restricting the distributor's arrears.