Legal Representative: Duties and Responsibilities
Companies in China are required to have a Legal representative to act as the natural persona to the companies legal persona, in essence to have a person directly responsible and liable for a companies actions. Due to this, the Legal representative role is the important role in a company and is attributed critical duties and responsibilities.
A Legal representative has the statutory power to represent and bind the Company towards third parties. The legal rep also representes the company to Chinese officials as well as submitting reports to Chinese regulatory bodies. The Legal Rep is the designated signatory for the company on such documents as tax documents, contracts and other legal documents which are to be handled and signed only by the Legal representative.
In China, one of the main duties of a Legal representative is the safekeeping of the company’s seal or “chop”. The seal will be used on a number of legal documents for the company and operational activities will only be executed with the seal. The Legal representative is also responsible for the safeguarding of the company’s assets and carrying out any legal transactions that are within the company.
As a Legal representative is the key decision maker of the Company, the legal rep must fulfill all acts in accordance to the PRC Company Law. A Legal representative has a duty of care of a reasonable person towards the company, which means that he must perform duties in a manner which is in the best interests of the Company. The Legal representative is obligated to attend board of director meetings as chairman, obey Chinese laws and company laws as well as deliver relevant information to the Board of Supervisors. The Legal representative is also required to exercise loyalty toward the company. He must achieve maximum benefits for the company and not any other entities.