Research On The Effect Of The Legal Representative’s Ultra Vires Act Of The Company

As a kind of civil subject,the company can independently undertake obligations and enjoy rights,which constitutes an important part of the legal person system.Therefore,the company’s role in modern commercial law is not only to maintain economic development,but also to maintain the stable operation of social order.The legal representative,as the organ that carries out the external activities on behalf of the company,considers that the company,as an organizational body,can not directly participate in civil and commercial activities in the view that the legal person is a real person,therefore,the act of the legal representative should be borne by the company.Because the company has to bear the consequences of the civil legal acts of the legal representative,the legal representative often acts in the name of the company that are not within his power,this is the ultra vires act of the legal representative.There was no specific regulation of the effects of that act in the Companies Act and no specific provision in the civil code,so a solution was urgently needed.From the perspective of comparative law,countries and regions have gradually abandoned the absolute principle of ultra vires invalidity,and formed more flexible legal provisions.In the Civil Code of China,it is stipulated that the contract made by the legal representative of a legal person and the bona fide counterpart beyond the scope of authority is valid,however,the conclusion that the contract between the ultra vires act of the legal representative and the malicious counterpart is ipso facto invalid can not be deduced,leaving a legal loophole.How to give full play to the role of the legal representative in the case of protecting the interests of the company,and how to promote the market circulation and trade better and faster in the case of protecting the interests of the opposite party.The provisions of the Civil Code on the validity of Acts of ultra vires representatives have not been substantially amended,and article five hundred and five of the Civil Code only provides that in the case of bona fide counterpart,the contract shall not be deemed to be invalid on the ground of exceeding the scope of business.However,the ultra vires civil activities of the legal representative not only include this form,but also include the violation of restrictive legal provisions,beyond the Articles of association or resolutions of the company.In the absence of detailed provisions in China’s "Company Law",it is not enough to only rely on civil law to regulate commercial acts.In the research process of ultra vires representative behavior,we should make clear our country’s existing responsibility system,and perfect the selection mechanism of representative system,but in the validity question,we should abandon the traditional "Good and evil dichotomy"thinking,it does not rigidly distinguish the dispute between "Representative"and"Agent",and tries to construct a model of effectiveness to be determined which is more in line with the modern thinking of rule of law.