Silicon Valley Legal Bible(28)A Legal Person? The Legal Representative? A Legal Representative?
Most people who read this paragraph may admire Dong Mingzhu's courage to act and take responsibility for consumers, but lawyers think it is really shocking and unbearable to listen to. Why? Because no living person can say that he is a "legal person", so what is a "legal person"? What are the differences and connections between "legal person" and "legal representative"? What does "legal representative" mean? In addition to China, which other countries have a legal representative system? Today we will take a look at the concept of "legal person".
Silicon Valley Treasure Book 42 Chapters, a legal encyclopedia tailored for founders. I am Liu Xiaoxiao, an American lawyer, and I will provide you with an in-depth interpretation of the legal logic behind entrepreneurship in Silicon Valley.
1. Legal person, legal representative, legal representative
In daily life, for convenience, we often use several words in some vocabulary as abbreviations. For example, scientific research is abbreviated as "research" , social insurance is abbreviated as "social security", and infrastructure is abbreviated as "infrastructure". However, not all words can be simply and crudely abbreviated by taking out two words.
For example, if you abbreviate "autonomous driving" to "self-driving", it will be troublesome, because "self-driving" is originally a proper noun, driving to a place by yourself, such as self-driving tour in Tibet. Can Harbin Buddhist College be abbreviated to "Harvard"? And can "lost property" be abbreviated to "relics"? So for many things, it is not enough to abbreviate a long noun to a short noun.
The same applies to “legal person” and “legal representative”.
1.1 Legal person
The term "legal person" refers to an organization established in accordance with the law and with independent legal personality. We can simply and roughly understand it as a company, which is regarded as an individual in law like every living person. The corresponding concept is a natural person, which is every living person in our real life.
So in the case of Gree, Gree Electric Appliances Co., Ltd. is a legal person.
1.2 Legal representative
The legal representative is the person who exercises the powers and performs the obligations on behalf of the legal person in accordance with the law or the articles of association of the legal person. We can simply and crudely say that the legal representative is the natural person with the greatest rights and responsibilities in each legal person.
So in the case of Gree, Dong Mingzhu is the legal representative of Gree Electric.
1.3 Legal representative
A legal representative usually refers to a person who handles specific affairs on behalf of a legal person. This means a natural person who handles a single matter or exercises authority on behalf of the company within a certain scope.
So in the case of Gree, Dong Mingzhu, as the legal representative, can authorize a department manager to represent the company in an international conference. This manager will be the legal representative of Gree Electric at this conference, but he does not have the full authority of the legal representative.
At this point, I think many people may think that I am writing these four ways of Kong Yiji's fennel beans, or like Luo Yonghao's small cup, medium cup, and large cup. It is purely quibbling. You may say, "Lawyer, you know what I mean anyway", but the concept of "legal person" is not really the case.
2. Other countries in the world do not have “legal representatives”
What? It turns out that outside of China, there is no such concept as "legal representative"?
Indeed, the term "legal representative" is like the RMB, which is not used in any other country except China. Some people would say that countries with a continental legal system have a legal representative system, while countries with an Anglo-American legal system do not, but this is far-fetched. In fact, the actual situation is that only China has a legal representative system, while other countries are collectively managed through an institution such as a board of directors.
In countries with the common law system, there is not even a position called the chairman. Although there is a chairman as the host of the board of directors, this is only a temporary authority for that meeting. The real governance rule of the common law is that the board of directors governs as a whole, rather than the legal representative representing the company by himself.
Or it can be said that the common law countries use the arbitrary director representation system, that is, as long as one is a director, he can represent the company. This is why the common law countries do not have official seals. The signature of a director with representative power is deemed to be a valid corporate act. The premise for establishing such an arbitrary representation system is a highly developed market economy and a long-term stable business environment. In other words, there are very few people who deliberately disrupt order, and there are not many people who have nothing to do and falsely convey imperial edicts.
Now let's take a look at what the company laws of different countries stipulate.
2.1 United States
Section 8.01 (Requirement for and Functions of Board of Directors) of the United States' Model Business Corporation Act provides:
(a) Except as may be provided in an agreement authorized under section 7.32, each corporation shall have a board of directors;
(b)Except as may be provided in an agreement authorized under section 7.32, and subject to any limitation in the articles of incorporation permitted by section 2.02(b), all corporate powers shall be exercised by or under the authority of the board of directors, and the business and affairs of the corporation shall be managed by or under the direction, and subject to the oversight of the board of directors.
2.2 Japan’s representative system
2014 New Amendment [Japanese Public Judiciary Code] Article 348, Subsection 1, Section 2:
(1) Excluding non-inclusive procedures, the business of a board management company (inclusive design, the same as below);
取締役が2人以上ある場合には、株式会社の業務は、定款に別段の定めがある場合を除き、取締役の過半数をもって決定する。
(2) If there are two or more directors, the affairs of the company shall be decided by a majority of the directors, unless otherwise provided in the articles of incorporation.
取締役が2人以上ある場合には、株式会社の業務は、定款に別段の定めがある場合を除き、取締役の過半数をもって決定する。
In general, directors represent the company. When there are more than two directors, each of them represents the company. Representative directors are appointed from the board of directors based on the mutual election of directors stipulated in the articles of association or the resolution of the general meeting of shareholders. Representative directors have the authority to act in all matters related to litigation or outside litigation.
Therefore, it can be seen that under Japan's company law, directors also represent the company.
2.3 German representative system
Article 35, paragraph 1 and paragraph 2 of the German Limited Liability Company Act stipulates:
(1) The managing director represents the company both in and out of court. If the company does not have a managing director (no management status), the shareholders shall represent the company when it is necessary to make a statement of intent or serve documents on the company;
Die Gesellschaft wird durch die Geschäftsführer gerichtlich und außergerichtlich vertreten. Hat eine Gesellschaft keinen Geschäftsführer(Führungslosigkeit), wird die Gesellschaft für den Fall, dass ihr gegenüber Willenserklärungen abgegeben oder Schriftstücke zugestellt werden, durch die Gesellschafter vertreten;
(2)
If several managing directors are appointed, they are all only jointly authorized to represent the company, unless the articles of association provide otherwise.
Sind mehrere Geschäftsführer bestellt, sind sie alle nur gemeinschaftlich zur Vertretung der Gesellschaft befugt, es sei denn, dass der Gesellschaftsvertrag etwas anderes bestimmt.
In addition, Article 172, paragraph 1 of the German Civil Code provides:
(1) As long as the agent holds a power of attorney granted by the principal, he may act on behalf of the principal. This does not apply if the agent has handed over the power of attorney to a third party and the third party knows or should have known that the power of attorney has terminated.
(1) Solange der Bevollmächtigte eine ihm vom Vollmachtgeber erteilte Vollmachtsurkunde im Besitz hat, kann er im Namen des Vollmachtgebers handeln. Dies gilt nicht, wenn der Vertreter dem Dritten die Urkunde ausgehändigt hat und dieser die Beendigung der Vollmacht kennt oder kennen muss.
Generally speaking, the managing director represents the company in internal and external business, and the managing director makes statements on behalf of the company. Once the managing director performs a legal act in the name of the company, he shall bear the corresponding responsibility, and as long as the third party has reason to believe that he represents the company, the legal effect shall be on the third party .
Therefore, under German company law, directors also represent the company.
I have cited so many examples from different countries, but I still want to tell you one thing. Except China, no other country has a legal representative system. Founders of the Liu Lawyer Channel should not be like Dong Mingzhu, who told others “I am the legal representative of the company”. Of course, I know you will not make this mistake, because you are the founders who follow Liu Lawyer and change the world.
Silicon Valley’s 42-chapter legal encyclopedia tailored for founders. I’m Liu Xiaoxiao, an American lawyer. See you next time.
