The State Administration for Industry and Commerce recently published the Further Strengthening the Imposition of Restrictions on Serving as a Legal Representative of a Corporate Body Notice (Gongshang Qiyezi [2010] No. 82). The notice calls on all local industrial and commercial authorities to acquire an accurate understand of, and strictly enforce, the provisions restricting eligibility to hold office as a legal representative of a corporate body which are contained in the PRC Company Law, the Company Registrations Administrative Regulations and the Registration of Legal Representatives of Corporate Bodies Administrative Provisions.
The Notice stresses that in accordance with the PRC Company Law and other relevant regulations, if a legal representative of a corporate body is banned from serving as a legal representative, the ban should apply to serving as a legal representative in any company he or she owns, as well as in other corporate entities, during the statutory restriction period.
The Notice also points out that the restriction only applies to serving as a legal representative, but not on being a shareholder. Moreover, when a restriction period expires, the restriction should be lifted automatically and promptly. No extension of the restriction period is permitted.
As to the proposal to set up a nationwide information system on the restriction on the holding of office by legal representatives, the Notice calls on industrial and commercial administrations at all levels to share and exchange such information with relevant government departments, courts and other bodies, and to collect information about individuals who are banned from acting as legal representatives because they have served prison sentences or because they have not settled major outstanding debts, so that the provisions of the PRC Company Law and other relevant legislation regarding such restriction can be enforced effectively based on this information.
