In order to implement the new requirements for company registration stipulated in the newly revised “Company Law” and the “Provisions of the State Council on Implementing the Registered Capital Registration System of the People’s Republic of China Company Law,” on December 20, 2024, the State Administration for Market Regulation published the “Implementing Measures for the Administration of Company Registration“, effective from February 10, 2025. In response to the execution difficulties concerning past effective judicial judgments involving company registration matters, the “Implementing Measures for the Administration of Company Registration” clearly states that companies are obligated to cooperate with changes for registered filing items such as shareholders, directors, supervisors, senior management, and legal representatives as specified in effective legal documents. The company registration authorities have the duty to assist in enforcement and make public announcements. The introduction of the “Implementing Measures for the Administration of Company Registration” provides practical and effective protection for individuals seeking removal from identity registrations like shareholders, directors, supervisors, senior management, and legal representatives, bridging the “last mile” gap in disputes over removal registration.
In this article, we will analyse the background and filing conditions for disputes over removal registration, focusing on the key points of court rulings in cases of legal representative removal registration lawsuits, and evaluate the impact of the “Implementing Measures for the Administration of Company Registration” on improving mechanisms for assisting in the execution of removal based on practical experience.
1. Background for Removal Registration Disputes
In recent years, disputes involving legal representatives requesting removal from registration have significantly increased. Some cases arise because the legal representative no longer wishes to continue serving; others involve nominal holders who do not wish to be named due to risk considerations or individuals who were registered as legal representatives without their knowledge. Since these individuals typically neither control the company and or possess necessary documents for changing company registration, they are unable to independently apply for a change in registration without the cooperation of shareholders and the company. Therefore, they would have no choice but to resort to judicial relief by filing a suit.
Prior to the Supreme People’s Court’s retrial ruling in case（2020）最高法民再88号, there was controversy within judicial practice regarding whether removal registration disputes met the conditions for court acceptance. The Supreme People’s Court pointed out in that case that if the people’s court does not accept the plaintiff’s lawsuit, the plaintiff would expose to a legal risk which continues to exist without any remedy, so the plaintiff’s suit for the change of legal representative registration can be accepted by the people’s court. Thereafter, removal registration disputes became an effective judicial remedy for directors, supervisors, senior management, and legal representatives to protect their rights.
2. Key Points of Rulings – Loss of Appointment Basis and Exhaustion of Internal Remedies
a. Whether the Basis for Holding Office Still Exists
When hearing cases of removal registration disputes, courts focus on whether the removal requester still a reasonable basis for has continuing to hold the relevant position. Therefore, it is necessary for the removal requester to clarify the basis for serving as a director, supervisor, senior management, or legal representative of the company and the legal relationship with the company, which has already terminated.
From the legislative purpose of the “Company Law“, directors, supervisors, senior management, or legal representatives should have substantial relevance to the company. Taking the relatively special role of legal representatives as an example, Article 10 of the “Company Law” clearly specifies the basis for appointing legal representatives, i.e., determined through the articles of association within the limits allowed by law. A legal representative must agree to serve as a director or manager executing company affairs on behalf of the company, thereby becoming a legal representative according to the provisions of the articles of association. Conversely, if the director or manager serving as legal representative resigns, it should be considered that he or she also resigns as legal representative.
This is because, regardless of whether the legal representative is a director or manager of the company, it is commonly held that a principal-agent legal relationship exists between the legal representative and the company. According to Article 933 of the “Civil Code“, both parties to a mandate contract have the right to arbitrary termination. Therefore, the legal representative also has the right to unilaterally terminate his or her position in the company, thereby dissolving the substantive connection with the company.
Therefore, if the removal requester has resigned from the positions of director or manager, they have lost the substantive basis for continuing to serve as the company’s legal representative. This point has been reflected in multiple precedents, such as (2023)浙0109民初17918号, (2023)赣0730民初1692号, and (2020)渝0103民初11853号, among others.
b. Whether All Internal Remedies Have Been Exhausted
Although the removal requester has a litigable interest, it does not mean that the court completely interferes with the company’s self-governance affairs but seeks a balance between the two interests. The judiciary remains cautious and restrained towards such matters, only considering judicial intervention when conflicts between the removal requester and the company cannot be resolved through internal self-governance mechanisms or when all internal remedies have been exhausted without resolution. Therefore, whether the removal requester has exhausted internal company remedies is a critical consideration in adjudicating such cases.
Regarding how to exhaust internal company remedies, for companies operating abnormally, such as being listed in the business abnormality directory or having their business licenses revoked, the court may likely recognize that the removal requester has no possibility of internal relief. For normally operating companies, the court may make different determinations based on the specific position of the removal requester in the company. For instance, for legal representative with roles such as chairman, executive director, or even shareholders, the court generally reviews whether the removal requester has convened boards or shareholders’ meetings regarding their resignation and re-election issues and whether they could not convene all shareholders to discuss the replacement of successors. For removal requesters holding only managerial positions, it is generally believed that at least they need to express their resignation wishes and removal requirements to the company explicitly, and if there are no results or refusal within a reasonable period. Such as in (2023)沪02民再23号，(2023)渝0114民初1057号，(2022)京02民终2059号.
3. Impact of the “Implementing Measures for the Administration of Company Registration” on the Mechanism for Assisting in the Execution of Removal
In recent years, even if the court supports the removal of registration matters, the prevailing party might still face execution deadlocks, where market supervision departments insisted on not processing the removal due to the lack of a successor. For example, in case（2023）沪0109执2407号案, during the execution process, the court issued a notice of assistance in execution to the Hongkou District Market Supervision Bureau of Shanghai, requesting assistance in handling the removal registration procedures. The bureau replied that the legal representative is part of the market entity registration matters, and since there is no information about a new legal representative, it cannot assist in processing the change.
In response, the “Implementing Measures for the Administration of Company Registration” will strengthen the responsibility of companies to comply with effective legal documents concerning past effective judicial judgments involving company registration matters. For companies failing to fulfill obligations within the deadline, the court can take compulsory measures according to law. It also clarifies the assisting obligations of registration authorities in removal execution. Furthermore, it requires the disclosure of removal information through the National Enterprise Credit Information Publicity System to enhance transparency.
Previously, Shanghai, Beijing, and other places have already introduced similar regulations. For instance, the Shanghai Market Supervision Bureau issued the “Several Measures for Deepening Reform of Operating Entity Registration Management and Optimizing the Business Environment” (沪市监注册〔2024〕61号) on February 23, 2024, and the Beijing Market Supervision Bureau released the “Notice on Issuing the ‘One Standard Four Dimensions’ Registration Promotion Measures for High-Quality Development of Operating Entities” (京市监发〔2024〕65号) on July 17, 2024, both clarifying the obligation of registration authorities to assist in the execution of removal registration.
Therefore, the aforementioned provisions on the obligation of company registration authorities to assist in enforcement have provided a feasible solution for the issue of handling the extinguishment of registration. Even if there are situations where the person subject to enforcement does not cooperate in processing enterprise information registration, company registration authorities still have the statutory obligation to assist the court in publicizing removal information in relevant company registrations, thereby achieving the effect of informing the public about the change registration matters. This system will resolve the connection issues between the court and company registration authorities during the execution of related judgments and help unify the different attitudes of company registration authorities across regions regarding removal registration. It provides effective implementation measures for the successful results of removal applicants, effectively resolving the dilemma faced by legal representatives and directors, supervisors, and senior management in smoothly stepping down in the market economy, realizing the legal effect of “removal”. It offers strong judicial support for optimizing the business environment and creates a more stable, fair, transparent, and predictable commercial environment for market participants.
- 王惠廷请求变更公司登记纠纷再审民事裁定书，最高人民法院，(2020)最高法民再88号，2020.04.29裁判
- 王建国、杭州坤睿置业有限公司请求变更公司登记纠纷一审民事判决书，浙江省杭州市萧山区人民法院，(2023)浙0109民初17918号，2023.12.18裁判
- 赵立与赣州梁宁置业有限公司请求变更公司登记纠纷一审民事判决书，江西省宁都县人民法院，(2023)赣0730民初1692号，2023.05.25裁判
- 光大安石（北京）资产管理有限公司与重庆悠游光石企业管理有限公司等请求变更公司登记纠纷一审民事判决书，重庆市渝中区人民法院，(2020)渝0103民初11853号，2021.05.27裁判
- 饶军平与上海海韵商务咨询有限公司等请求变更公司登记纠纷审判监督民事判决书，上海市第二中级人民法院，(2023)沪02民再23号，2023.07.13裁判
- 李某某与彭水某某地产开发有限公司,重庆某某地产发展有限公司请求变更公司登记纠纷一审民事判决书，重庆市黔江区人民法院，(2023)渝0114民初1057号，2023.06.30 裁判
- 韬蕴（北京）影视投资管理有限公司与谢谦请求变更公司登记纠纷二审民事判决书，北京市第二中级人民法院，（2022）京02民终2059号，2022.02.28裁判。
- 倪岳与上海添一投资有限公司与公司有关的纠纷执行裁定书，上海市虹口区人民法院，(2023)沪0109执2407号，2023.08.31裁判
