Studies And Responses On The Legal Risk Of The Contract Management In Medium-sized And Small Entrprises

Recently, the development of the market economy has provided more opportunities to Chinese small and medium enterprises (SME’s), but the law-based control of the market economy makes SME has to face much more legal risk than in the past. Compared with the other business risks, the legal risk has controllability and predictability so that the SME’s could avoid legal risks by countermeasures in ahead. The legal risk of the enterprises is mainly divided into external legal risk and internal legal risk. External risk is due to the change of external environment of enterprises. Such as change of national policy and law and regulations which are uncontrolled factors. The establishment and internal management of enterprise bring about the internal legal risk of enterprise. The internal legal risk of enterprise throughout the whole process of enterprise included the establishment, management, and even the bankruptcy and the liquidation. Chinese SME has many original drawbacks such as weak capital basis and its incomplete internal management system. These drawbacks make enterprises vulnerable while encountering legal risk, and even due to enterprise fall into the mire of lawsuit, what is worse, the enterprise will bankruptcy because of this reason.Based on the analysis above mentioned, the article analysis the definition of legal risk as the first step, and discuss the definition and features of legal risk which raises the definition of legal risk management. In addition, the article analysis the importance and necessary of establishment of system of SME legal risk management, and point out the reasons of the relatively backward of legal risk management among Chinese SME. Besides, the article point out the question that the attitude toward the legal risk management of manager, the enterprise investment in legal risk and the management level of enterprise managers will effect on the final result of legal risk management.In the last, writer put the proposals towards the Chinese SEM legal risk that the enterprise should establish the contract legal risk management early warning mechanism. For instance, the enterprise managers should accelerate the investment on legal affairs, further improve the internal management system in enterprise to guarantee the normal operation of the legal risk prevention mechanism, in addition, legal personnel should strengthen the scrutiny of the contact and the consciousness to legitimate rights.In the last, author give the prospect to the establishment of legal risk prevention mechanism of contract legal risk management in Chinese SME, and suggest that SME should really use the contract legal risk prevention mechanism in practice. The author hope the article could provide useful reference to the establishment of contract legal risk management and prevention mechanism among Chinese SME.