Viewpoint | Case Study: Exercise of the Right to Request Change/Removal of Legal Representative Registration
Published:
2025-09-01
On April 27, 2007, Company A and Company B jointly invested to establish Company C. Mr. Sun was appointed by Company A to serve as a director of Company C. According to the company's articles of association, Mr. Sun was elected chairman of the board by the board of directors, becoming the legal representative of Company C. On December 28, 2023, Mr. Sun resigned from Company A, and both parties signed a "Certificate of Termination and Cancellation of Labor Contract." On January 2, 2024, Mr. Sun signed a "Labor Contract" with Company D. From January 2024 to July 2025, Company D paid social insurance for Mr. Sun. After being transferred to a new position at Company D in January 2024, Mr. Sun sent letters to Company C and the two shareholders regarding his resignation and the change of chairman and legal representative of Company C, but received no response. On June 5, 2025, Company A, following legal procedures, organized an extraordinary shareholders' meeting of Company C and passed a resolution agreeing to Mr. Sun's resignation as legal representative and chairman of Company C. However, Company B did not attend the meeting nor vote. Company C refused to process the change of legal representative registration. Having exhausted all internal means to change the legal representative and chairman, Mr. Sun filed a lawsuit against Company C in court on June 30, 2025.
I. Basic Case Facts
On April 27, 2007, Company A and Company B jointly invested to establish Company C. Mr. Sun was appointed by Company A as a director of Company C. According to the company's articles of association, Mr. Sun was elected chairman of the board and became the legal representative of Company C. On December 28, 2023, Mr. Sun resigned from Company A, and both parties signed a "Certificate of Termination of Labor Contract." On January 2, 2024, Mr. Sun signed a "Labor Contract" with Company D. From January 2024 to July 2025, Company D paid social insurance for Mr. Sun.
After being transferred to a new position at Company D in January 2024, Mr. Sun sent letters to Company C and its two shareholders regarding his resignation and the change of chairman and legal representative of Company C, but received no response. On June 5, 2025, Company A legally convened an extraordinary shareholders' meeting of Company C and passed a resolution agreeing to Mr. Sun's resignation as legal representative and chairman of Company C. However, Company B did not attend or vote. Company C refused to process the change of legal representative registration.
Having exhausted all internal means to change the legal representative and chairman, Mr. Sun filed a lawsuit against Company C on June 30, 2025.
II. Court Judgment
After trial, the court ruled as follows: Company C shall apply to the registration authority within 30 days from the effective date of this judgment to change the registration of the legal representative and chairman of Company C; if Company C fails to do so within the specified period, the registration of Mr. Sun as legal representative and chairman shall be removed by the registration authority within 35 days from the effective date of the judgment.
The specific reasons for the judgment are as follows:
The court holds that this case concerns a dispute over the request to change company registration. According to Article 64 of the Civil Code of the People's Republic of China: "During the existence of a legal person, if registration matters change, an application for change of registration shall be made to the registration authority in accordance with the law." Article 13 of the Company Law stipulates: "The legal representative of a company shall be the chairman of the board, executive director, or manager as stipulated in the articles of association, and shall be registered according to law. Changes to the legal representative shall be registered." Article 3 of the Regulations on Market Entity Registration Management of the People's Republic of China states: "Market entities shall register in accordance with these regulations. Without registration, they shall not engage in business activities in the name of the market entity, except as otherwise provided by law or administrative regulations. Market entity registration includes establishment, change, and cancellation registration." Article 24 states: "Applications for change registration shall be made to the registration authority within 30 days from the date of the change resolution, decision, or occurrence of statutory change. If approval is required, the application shall be made within the validity period of the approval document."
According to the relevant provisions of the Company Law and administrative regulations on market entity registration management, changes to the legal representative or executive director of a limited liability company are matters of company registration. Such changes must be applied for with the company registration authority according to law, and the company is the legal subject obligated to apply for such changes. In this case, Mr. Sun's submitted evidence, including the "Certificate of Termination of Labor Contract" and "Labor Contract," proves his resignation and that he no longer has substantive ties with Company C. After resigning, Mr. Sun notified the shareholders according to Company C's articles of association, and Company A convened a shareholders' meeting and passed a resolution accordingly. However, Company C did not implement the change as agreed. Mr. Sun filed this lawsuit seeking judicial relief, which the court supports. According to Article 70 of the Company Law of the People's Republic of China (2023): "The term of office of directors shall be stipulated in the articles of association, but shall not exceed three years per term. Directors may be re-elected. If the term expires without timely re-election, or if resignation causes the board to fall below the legal number, the original directors shall continue to perform their duties until the new directors take office. Directors who resign shall notify the company in writing, and the resignation takes effect upon receipt, except as above." To ensure normal company operations are not disrupted by individual director resignations, resigning directors must fulfill their duties diligently until the new chairman takes office. However, this period should be reasonable to prevent malicious delays. In this case, Mr. Sun resigned on December 28, 2023, and more than a year passed before filing this lawsuit. He also notified the company and shareholders by mail, but Company C has yet to make the change, clearly exceeding a reasonable period.
In summary, Company C shall apply to the registration authority within 30 days to change the registration of Mr. Sun as the company's legal representative and chairman; if overdue, the registration shall be removed.
Additionally, the change of chairman from Mr. Sun to another person is an internal governance matter of the company. After changing or removing Mr. Sun's chairman registration, Company C and its shareholders should promptly elect a new chairman to avoid potential legal risks.
III. Lawyer's Opinion
In commercial practice, it is not uncommon for legal representatives to be unable or unwilling to continue their duties due to resignation, conflicts with the company, or abnormal company status. Usually, changes to the legal representative are company autonomy matters requiring internal decision-making and resolution before market entity registration changes can be processed. If the company refuses to cooperate or is unable to operate normally, registration changes face significant difficulties. In such cases, the legal representative exercising the right to request change or removal of registration through civil litigation becomes the only option. becomes the only choice.
Furthermore, in enforcement cases, when the company is listed as the respondent and its assets are subject to preservation or other enforcement measures, the court may also impose consumption restrictions on the company's legal representative, causing inconvenience in many aspects of their life. The "Opinions of the Supreme People's Court on Further Strengthening the Concept of Good Faith and Civilized Enforcement in Enforcement Work" (Fa Fa [2019] No. 35) Article 17(2) states: "After a unit respondent is restricted from consumption, if the legal representative or main person in charge changes due to operational needs, the original legal representative or main person in charge may apply to lift the restriction by proving they are not the actual controller or directly responsible for debt performance. The people's court shall approve upon verification and impose restrictions on the new legal representative or main person in charge according to law." According to this opinion, after the company completes the change or removal of registration of the legal representative or main person in charge, the original legal representative or main person in charge may apply to lift consumption restrictions by proving they are not the actual controller or directly responsible for debt performance, and the court shall approve upon verification.
Therefore, when a company refuses to cooperate in changing the legal representative registration, the legal representative should actively exercise the right to request change or removal of registration to protect their legitimate rights and interests.
Key words:
Zhongcheng Qingtai Jinan Region
Address: Floor 55-57, Jinan China Resources Center, 11111 Jingshi Road, Lixia District, Jinan City, Shandong Province
