Nominal legal person means that one party agrees that the other party only participates in the establishment of the company in name, but actually does not contribute. The registered capital of the company is all contributed by the other party, and the party that does not contribute is a nominal legal person. The legal representative generally represents a legal person and needs to bear the responsibilities of the company, but the legal representative who has an exemption agreement can be exempted from relevant responsibilities.
The nominal legal representative is legal, but there are the following potential legal risks:
1. The nominal legal representative may bear administrative responsibility for the company's illegal acts. Unless you can prove that you are ignorant of the company's behavior;
2. The nominal legal representative may be liable for the losses caused to the company by himself, the company's directors, supervisors and senior managers. The company is responsible for repayment to the extent of its own property. However, if the actual controller manipulates the company with fictitious capital contribution, evades capital contribution, conceals or transfers assets in the course of litigation, or disposes of property without liquidation, the nominal legal representative shall bear corresponding civil liability for compensation;
3. In terms of criminal responsibility, in addition to punishing the unit, the legal representative and other responsible persons may also be investigated for criminal responsibility;
4. In terms of personal freedom, when the company faces bankruptcy proceedings, applies for compulsory execution or fails to pay taxes, the nominal legal representative may be subject to corresponding compulsory measures by the judicial and administrative organs. Such as blacklist, loan restriction, consumption, etc.
Article 49 of the Civil Code of People's Republic of China (PRC) If an enterprise as a legal person is under any of the following circumstances, it may impose administrative sanctions and fines on its legal representative in addition to investigating the legal person's liability. If the case constitutes a crime, criminal responsibility shall be investigated according to law:
(1) engaging in illegal business beyond the business scope approved and registered by the registration authority;
(2) Concealing the real situation from the registration authority or the tax authority or practicing fraud;
(3) Evading funds or hiding property to avoid debts;
(4) Disposing of property without authorization after dissolution, cancellation or bankruptcy;
(5) Failing to apply for registration and announcement in time at the time of alteration or termination, thus causing great losses to the interested parties.