A company is an organization with the capacity for civil rights and civil conduct. As a fictitious civil subject, all civil acts of a company need to be carried out and completed through the acts of natural persons. According to Article 61 of the General Provisions of the Civil Law, the legal consequences of civil activities carried out by the legal representative in the name of a legal person shall be borne by the legal person. It can be seen that the act of the legal representative is generally regarded as the act of the company itself.
However, in practice, with the development of formal contracts, the official seal is indeed a symbol of the identity of the company's main body, and has become an indispensable element of modern commercial transactions. Normally, any document stamped with an official seal is considered to represent the will of the company's legal person.
However, the Company Law does not specifically stipulate the persons who keep the company's official seal, and does not exclude the possibility of persons other than the legal representative keeping the official seal. In other words, the validity of the official seal may exist independently from the legal representative. In real life, it is not surprising that there are more and more conflicts between the holder of the official seal and the legal representative.
So, when there is a conflict between the official seal holder and the legal representative, who can represent the company and how to solve the conflict between the two?
Keywords: representation, official seal, legal representative, internal and external effect
1. The legal effect of the company's official seal and the custody of the official seal
1. The legal effect of the official seal
According to Article 16 of the Regulations on the Administration of Registration of Enterprise Legal Persons, an enterprise legal person may engrave an official seal, open a bank account, sign a contract, and carry out business activities on the basis of the Business License of Enterprise Legal Person. Under normal circumstances, after receiving the business license, the enterprise legal person will engrave three seals, including the official seal, the special financial seal and the special contract seal. Depending on the scope of business, the company uses different seals. Except as otherwise provided by law, all letters, official documents, contracts and other company materials stamped with the company's official seal can generally be regarded as representing the will of the company's legal person.
However, the official seal seal has similar defects as the signature of the note, the note can be forged, and the official seal may also be stamped without authorization. Although in terms of form, the official seal can prove the production of relevant documents and materials, if there is only an official seal and no information indicating that it is the true intention of the company, such as the signature of the person in charge and the power of attorney, it is not enough to show that it is the legal authorization of the signing company, nor can it be bound by it.
Therefore, in addition to the company's official seal, the legitimacy and authenticity of the official seal can be strengthened by providing other supporting materials such as the authorization document, the signature of the handler, and the industrial and commercial registration and filing materials used in the official seal.
2. Custody of the official seal
China's company law does not stipulate who and when the official seal should be kept. In real life, for the needs of the company's daily operation and management, the number of cases where the official seal is handed over to non-specific people for custody and use is also increasing. In order to avoid confusion among the entities holding the official seal, it can be clearly agreed through the articles of association ---- representing the highest standard of corporate autonomy. In the case of the company's official seal being misappropriated, it can be requested to be returned by a specific person through litigation, so as to promptly correct the behavior that holds the official seal and is detrimental to the company's interests and reduce the possible economic losses.
At the same time, enterprises should also establish a seal and license management system, and make clear provisions on the engraving, storage, authorization and use of seals, so as to reduce the situation of company executives taking advantage of their positions to encroach on the company's seal or affix the seal without authorization, so as to ensure that the company's normal operation will not be affected and infringed.
2. The will and statutory provisions of the legal representative
1. Election of legal representatives
According to Article 13 of the Company Law, the legal representative of a company shall be the chairman, executive director or manager in accordance with the provisions of the articles of association of the company, and shall be registered in accordance with the law. If the legal representative of the company is changed, the change registration shall be completed.
Therefore, the legal representative may be selected from among the chairman, executive directors and managers.
Lawyer's opinion:
Article 25 of the Company Law stipulates that the articles of association of a limited liability company shall specify the legal representative. At the same time, Article 43 stipulates that a resolution to amend the articles of association of the company must be passed by shareholders representing more than two-thirds of the voting rights.
Therefore, if the name of the legal representative is clearly specified in the articles of association, the change of legal representative must be convened at a shareholders' meeting and approved by shareholders representing more than two-thirds of the voting rights before it is valid. By recording the name of the legal representative in the articles of association, the arbitrariness of changing the legal representative can be reduced.
2. Scope and restrictions of authorization of the legal representative
(1) According to Article 61 of the General Provisions of the Civil Law, the person in charge of engaging in civil activities on behalf of the legal person in accordance with the provisions of the law or the articles of association of the legal person shall be the legal representative of the legal person. The legal consequences of civil activities carried out by the legal representative in the name of the legal person shall be borne by the legal person.
It can be seen that China does not strictly define the scope of authorization of the legal representative. In foreign economic exchanges, the legal representative's civil activities related to the company are regarded as the company's acts.
(2) According to Article 16 of the Company Law, when a company invests abroad or guarantees others, it must be resolved by the board of directors and the shareholders' meeting in accordance with the provisions of the articles of association. For the company to provide guarantees for shareholders and actual controllers, it is also necessary to pass a resolution of the shareholders' (general meeting). This legal provision explicitly denies the decision-making power of the legal representative and is a restriction on the authority of the legal representative.
(3) In order to prevent the legal representative from exercising the right of representation without authorization or exceeding his authority, the company may, through the articles of association, clearly limit the authority of the legal representative, and may claim damages from the legal representative when the legal representative acts ultra vires and damages the interests of the company. However, this agreement is limited to internal validity and cannot be used against bona fide third parties outside the company.
* Article 50 of the Contract Law [Acts of the Legal Representative Exceeding Authority] Where the legal representative or responsible person of a legal person or other organization enters into a contract beyond his authority, the act of the representative shall be valid unless the counterparty knows or should know that he has exceeded his authority.
3. If the legal representative and the official seal holder are not the same person, who can represent the company, and how to resolve the conflict between the two?
1. The legal representative is higher than the official seal
When the legal representative of the company and the holder of the official seal are not the same person, it is a typical situation for shareholders to compete for control of the company.
Based on the above analysis of the validity of the official seal, it can be seen that the official seal does not automatically have legitimacy and authenticity, and is not enough to be independently and directly recognized as representing the true meaning of the company. According to the relevant General Provisions of the Civil Law and the principles of the Company Law, under normal circumstances, it should be determined that the legal representative, as the representative organ of the company's will, can represent the true intention of the company.
2. Disputes over the return of licenses and licenses to achieve rights and remedies
The most fundamental way to resolve the contradiction between the legal representative and the holder of the official seal is to take the company as the plaintiff and file a "lawsuit for the return of the company's license" against the holder of the official seal. According to the relevant provisions of the Civil Procedure Law, the legal representative does not need special authorization to be the litigation representative of the company. The legal representative may file a lawsuit in the people's court in the name of the company by signing the complaint, which shall be regarded as the litigation act of the company itself.