We assist with eligibility assessment, resignation procedures, amendment registration document preparation, and deregistration of former legal representative. Contact us for efficient and compliant legal representative change services.
Scope of Eligible Persons
Article 10(1) of the New Company Law provides that the legal representative of a company shall, in accordance with the company's articles of association, be a director or manager who executes company affairs on behalf of the company. Compared with the previous Company Law, the scope has been expanded from "chairman of the board, executive director or manager" to any "director or manager who executes company affairs".
Substantive Connection Requirement
The legal representative must "execute company affairs", meaning actual participation in the company's operation and management. This provision aims to regulate the common practice of "nominee legal representatives".
Disqualifications
According to Article 178 of the New Company Law, a person who falls under any of the following circumstances may not serve as a director, supervisor or senior manager (the legal representative is subject to the same restrictions):
If a company elects, appoints or hires a director, supervisor or senior manager in violation of the preceding paragraph, such election, appointment or hiring is void.
Automatic Effect of Resignation
Article 10(2) of the New Company Law stipulates that if a director or manager who serves as the legal representative resigns, they are deemed to have simultaneously resigned as legal representative. A director or manager shall notify the company in writing of the resignation, which becomes effective on the date the company receives the notice, and the legal representative status terminates simultaneously.
Company's Obligation to Appoint a New Legal Representative
Article 10(3) of the New Company Law requires that the company shall appoint a new legal representative within 30 days from the date of resignation of the legal representative.
Statutory Restriction on Director Resignation
Under Article 70(2) of the New Company Law, if a director's resignation would cause the number of board members to fall below the statutory minimum, the resigning director shall continue to perform the duties of a director until a replacement director assumes office.
Time Limit for Amendment Registration
According to Article 24 of the Regulations on the Administration of Market Entity Registration, where a registered item of a company changes, the company shall apply to the registration authority for amendment registration within 30 days from the date the resolution, decision or statutory change occurs.
Documents Required for Amendment Registration
To apply for amendment registration of the legal representative, the following documents shall be submitted to the company registration authority:
Change in the Required Content of the Articles of Association
The New Company Law requires that the articles of association state the method of selection and change of the legal representative, rather than merely recording the name. For companies established before July 1, 2024, if the relevant provisions in their articles are inconsistent with the New Company Law, they shall be adjusted. Any amendment to the articles requires a resolution adopted by shareholders representing two-thirds or more of the voting rights (Article 66(3) of the New Company Law).
Legal Liability for Failure to Register the Change in Time
Under Article 250 of the New Company Law, if a company fails to register a change of registered item as required, the company registration authority shall order it to complete the registration within a prescribed time limit; if it fails to do so, a fine of not less than RMB 10,000 but not more than RMB 100,000 shall be imposed. In addition, a change of legal representative that has not been registered may not be asserted against a bona fide third party (Article 34(2) of the New Company Law).
Legal Basis
Article 10(2) of the New Company Law (the "automatic resignation" mechanism) provides a legal basis for a nominee legal representative to file a lawsuit seeking removal of their legal representative registration information after resignation.
Enforcement Guarantee
Article 23 of the Measures for the Implementation of Company Registration Administration (Order No. 95 of the State Administration for Market Regulation, effective February 10, 2025) stipulates that when a people's court delivers a letter of assistance in enforcement to the company registration authority, requesting assistance in removing information on the legal representative, the company registration authority shall publicly disclose the removal information through the National Enterprise Credit Information Publicity System. This provision provides an effective enforcement mechanism for deregistration.
Paths for Deregistration
Judicial Protection for Nominee Legal Representatives
In judicial practice, courts generally examine two key points: "whether internal remedies have been exhausted" and "whether there is a substantive connection between the legal representative and the company". A nominee legal representative who files a lawsuit for deregistration will generally receive court support.
If you need further guidance on the specific procedures for changing the legal representative or wish to engage our services, please contact us.
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