Research On The Reform Of The Legal Representative System Of Companies

Under the current legal framework,the legal representative has a wide range of rights,facing the company.He has the identity of chairman and manager,and is the operator of the company;Facing the trading party,he is the external representative of the company.Therefore,the legal representative has two sides.Its external representation enjoys unlimited power due to its legality and sole tenure,while the business execution power has no actual voice within the company,forming a huge gap between internal and external powers,resulting in the scope of the legal representative’s acts on behalf of the legal person to the outside is greater than the duties performed on the legal person to the inside,thus acting beyond his authority.Looking at the current practice and legal norms on the ultra vires regulation of legal representatives,the legal representative system is difficult to fully cope with the practice and has to make appropriate adjustments.The adoption of alternative measures such as legal person seal and legal person special representative is due to the rigidity of the system;In terms of the external environment,it is difficult for the counterpart to clarify the power limit of the representative by reviewing the articles of association.According to Article 504 of the civil code,when the creditor does not know or presumes that he does not know that the legal representative has ultra vires,the ultra vires act is effective,but the review obligation of the opposite party is not completely clear,which has become a controversial issue in the academic circles.Since the articles of association are not publicly available,even if the opposite party wants to consult them out of risk awareness,they often do not know where to start.However,the legal person shall bear the legal consequences for the official acts of the legal representative,and can only pursue its own responsibility through the internal shareholder representative litigation.However,it is difficult to achieve good results in the systematic environment of shareholder oppression.The real metaphor in legal logic is still the deviation between the legislative purpose and practice of the legal representative of the company in China.The theoretical foundation of the company representative system has the shadow of "fatherhood" in the context of the restructuring of state-owned enterprises.Excessive "fatherhood" conflicts with the order formed by corporate autonomy and deviates from the internal requirements of corporate governance.When the company law was revised in 2005,the manager,executive director and chairman of the board of directors were included,and the authority of the legal representative was also limited.Therefore,the current focus on the legal representative has changed to "responsibility bearing when the internal meaning formation of the legal person is inconsistent with the external meaning expression".For a long time,the "representative theory" and "agency theory" of legal representatives have become a hot topic.The debate belongs to the discussion on whether legal persons have independent personality and the basis of legitimacy.This kind of argument can only solve the problem of whether the legal person should be responsible for the acts of the legal representative,but it can not fundamentally regulate the acts beyond the authority.As for the regulation of ultra vires,specifically speaking,as the board of directors has the characteristic of executive representation,the appointment and removal mechanism and specific personnel should be determined by the board of directors;There is no requirement for the number of people to be selected,and the company will exercise autonomy according to its own scale and development;As for the candidates of the representatives,the post holding restriction shall be canceled to avoid the overlap between the company’s representatives and the members of other governance subjects.For the accountability of ultra vires,the accountability model of "organization + identity" is adopted,and the liability system of ultra vires of legal representatives is analogized to the liability system of sponsors when the company is established.The legal representatives at fault are required to bear joint and several liabilities with the company,increasing the cost of ultra vires of legal representatives.