Sheng Code Practice | Wang Zhihong: Analysis of the Obligation of the Legal Representative's Review of the Legal Representative's Overstepping Acts-Based on Article 20, Paragraph 1, of the Partial Interpretation of the General Principles of Contract Compilation
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2024.04.26
Summary: the standard of review obligation for the legal representative's ultra vires act has gone through the process of determining that the counterpart of the legal representative's ultra vires guarantee does not have the review obligation, to determining that the counterpart of the ultra vires guarantee has the formal review obligation, to the reasonable review obligation stipulated in the interpretation of the guarantee system, and to the extension of the ultra vires guarantee to the ultra vires act in article 20, paragraph 1 of the partial interpretation of the general rules of the contract. However, it is urgent to clarify how to define the standard of reasonable examination obligation and what are the provisions of current laws and administrative regulations on the limitation of the representation of legal representatives. Reasonable review obligation is a kind of review obligation between formal review and substantive review. In my opinion, the obligation of reasonable review requires that the counterpart should be careful and prudent in normal transactions, and on the basis of the formal completeness of the review documents, it should also pay attention to the validity and legality of the form of the resolution, but does not include the authenticity of the review resolution itself and the legality of the content of the resolution. Reasonable review obligation can be defined from three dimensions: the object of review, the content of review and the degree of review. A reasonable review also takes into account other factors, including the materiality of the transaction, the identity of the relative, the identity of the legal person, and the number of transactions. With regard to the rules concerning the reasonable examination obligation of the counterpart in the current laws and administrative regulations, the author lists the provisions of articles 16, 59, 67, 116, paragraph 3 and 135 of the company law, and articles 62 and 81 of the securities law.
Keywords: ultra vires representative review obligation reasonable review & nbsp; review object review content & nbsp; review degree
Article 61, paragraph 2, of the Civil Code stipulates: "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." Since our country adopts the position of legal person's truth, legal person has the capacity for civil conduct, and the legal representative is the meaning organ and foreign representative organ of legal person. the legal consequences of civil activities carried out in the name of legal person shall be borne by legal person 1. The legal representative system is based on the theory of representation. from the perspective of difference from agency, the core difference between agency and representation is that under the agency path, the issuance and acceptance of meaning expression are completed by the agent, but the legal effect is borne by himself 2. The representative, on the other hand, regards the conduct of the legal representative as the conduct of the legal person, and the two are identical. However, this is inconsistent with the actual situation. Although the legal representative is the legal representative of a legal person, he is also a natural person of his own. It is impossible for the two to always maintain the unity of interests. If the legal representative abuses the right of representation to sign a contract based on his own interests, it may bring immeasurable losses to the legal person, so it cannot be concluded that the contract signed by the legal representative in the name of the legal person is valid for the legal person. But at the same time, the interests of the counterparty and the security of the transaction are also worth protecting. for this reason, the first paragraph of article 20 of the "interpretation of the application of the the People's Republic of China civil code of the supreme people's court on the application of the general provisions of the contract" (hereinafter referred to as the "partial interpretation of the general provisions of the contract") stipulates: "laws and administrative regulations restrict the representation of the legal representative of a legal person or the person in charge of an unincorporated organization, and stipulate that the matters involved in the contract shall be decided by the authority of the legal person, or it should be decided by the executive agency of a legal person or an unincorporated organization, and the legal representative or person in charge enters into a contract in the name of a legal person or an unincorporated organization without obtaining authorization, and the counterpart who has not fulfilled the obligation of reasonable review claims that the contract is against a legal person or an unincorporated organization. If the organization takes effect and bears the responsibility for breach of contract, the people's court will not support it.", This clause clarifies that if certain restrictions have been imposed on the representative power of the legal representative in laws and administrative regulations, and requires that such acts must be resolved by the authority or decided by the executive agency, if the legal representative does not obtain authorization to conclude a contract in the name of a legal person, If the counterpart fails to fulfill the obligation of reasonable review, the counterpart cannot claim that the contract is valid for the legal person. The question is, what is the standard of the obligation of reasonable examination of the relative, that is, how to define the obligation of reasonable examination? What are the provisions of the current laws and administrative regulations on the limitation of the representation of the legal representative, that is, under what circumstances the relative has a reasonable obligation to examine? The above two points need to be discussed and clarified.
China's judicial practice on the legal representative's ultra vires guarantee behavior, experienced by the initial majority of cases that the company's external guarantee contract is valid, the counterpart does not need to bear the obligation of review,3 to later think that the relative person needs to bear certain review obligations, which involves the dispute of whether to bear the formal review or substantive review, to the final majority of judicial decisions that the relative person in the security contract burden is the process of formal review obligations. For example, in 2017 Min Er Zhong Zi No. 184 "Appeal Case of Loan Guarantee Contract Dispute between Shenzhen Branch of China Everbright Bank and Chuangzhi Information Technology Co., Ltd.", the Supreme People's Court held that "bank staff are not handwriting experts, and banks also lack the technical ability to conduct substantive examination. Banks only have the obligation to examine the resolution in a formal way, but have no obligation to examine the substantive authenticity of the resolution." 4 However, the obligation of formal examination is too light on the counterpart, so that it is criticized as "formal examination is tantamount to non-examination". After the promulgation of the Civil Code, article 7 of the Interpretation of the Supreme People's Court on the Application of the Guarantee System of the Civil Code of the People's the People's Republic of China of China (the Interpretation of the Guarantee System) proposes a reasonable standard of review, but the Interpretation of the Guarantee System is only for external guarantees and is not universal. Therefore, Article 20, paragraph 1, of the Partial Interpretation of the General Principles of Contracts, once again proposes the standard of reasonable review from the perspective of the universal ultra vires behavior of the legal representative (person in charge), but how to determine the standard of reasonable review still needs to be analyzed, determined and judged. The following author analyzes the criteria of formal examination and substantive examination respectively, and then combines the two to discuss and define the criteria of the relative's reasonable examination obligation.
(I) form review
Generally speaking, the so-called formal examination refers to the relative person only examining the formal requirements of the material, that is, examining whether the material is complete and conforms to the legal form. Only the formal elements of the resolution of the shareholders' meeting or the resolution of the board of directors shall be reviewed, and the authenticity and validity shall not be reviewed. 5 under the formal examination standard, the counterpart has no obligation to examine the procedural defects of the guarantee resolution, such as the convening of the examination meeting, the legality of the voting procedure and the conformity with the articles of association, and there is no need to examine the authenticity of the signatures of shareholders and directors.
(II) substantive review
substantive examination requires the counterpart to conduct a comprehensive examination of the authenticity, legality and validity of the articles of association and resolutions, notification, convening and voting procedures, resolution contents, signatures and other contents. Substantive examination is too harsh for the relative, the relative can hardly have such ability, and should not be burdened with such heavy obligations. However, the obligation of substantive examination can be used as a reference for determining the obligation of reasonable examination, combining the criteria of formal examination and substantive examination to determine the reasonable obligation of the relative.
(III) reasonable review
Reasonable review is generally considered to be between formal and substantive review. Reasonable examination is neither like formal examination, which simply refers to the completeness or formal integrity of documents, nor is it like substantive examination, which requires the counterpart, as an external third party, to impose excessive verification requirements on the authenticity and legality of the internal documents of a legal person, such as articles of association, resolutions, signatures and other documents. The author believes that the reasonable examination obligation requires the counterpart to be careful and prudent in normal transactions. On the basis of examining whether the materials are complete and conform to the formal requirements of legal form, reasonable examination should further pay attention to: the consistency of the shareholders signed in the resolution with the shareholders recorded in the articles of association or the register of shareholders, and the consistency of the appearance of the shareholders' signature in the company resolution with the shareholders' signature in the articles of association, however, it is not necessary to identify the authenticity of the signature. Review whether the convening and voting procedures of the company are in accordance with the law and the articles of association; review that the sum of the voting rights and consent voting rights in the resolution meets the minimum voting rights requirements of the law and the articles of association; and, if guarantees are involved, pay attention to whether the amount of the guarantee in the resolution exceeds the limits of the articles of association for a single guarantee. 6 is a reasonable review obligation, requiring the counterpart not only to review the completeness of the documents, but also to pay attention to the consistency between the resolution and the documents such as laws, administrative regulations, articles of association, shareholder register, etc. to a certain extent, but does not include the authenticity of the review resolution itself (including the authenticity of the signature) and the legality of the resolution content. On the basis of the aforementioned requirements for a reasonable review obligation, the author will further refine the criteria for a reasonable review obligation.
some scholars believe that how to define reasonable review needs to solve the following contents: first, the object of relative review; Second, the content of the relative review; Third, the standard of relative review. 7 the author basically agrees with this division, but thinks that the "review standard" should belong to the superior concept of "review object" and "review content", and the corresponding third review standard should be adjusted to "review degree". The standard of reasonable review obligation is discussed from the three dimensions of the object of review, the content of the review and the degree of review.
Objects (I) Reasonable Review
(1) Authority Resolution or Executive Decision
laws or administrative regulations restrict the representation of legal representatives to certain specific acts, requiring such acts to obtain resolutions of the authority or decisions of the executive authority, so they need to prove their good-faith counterparts, the first element of a reasonable review is to obtain a resolution document from the corporate shareholders' meeting or board of directors agreeing to the act or transaction.
(2) Articles of Association
laws or administrative regulations restrict the legal representative's representation in a certain act. at this time, if the counterpart only obtains a resolution that meets the requirements of laws and administrative regulations, the resolution may not comply with the provisions and requirements of the articles of association. Because, unless the law provides for a certain restriction of representation clause, the articles of association of a legal person may no longer agree on their own. Otherwise, the articles of association of a legal person may agree to be stricter or looser than the restrictions of laws and administrative regulations, subject to the restrictions prescribed by law. In this case, especially when the restrictions on the representation rights stipulated in the articles of association of the legal person are more stringent, only a resolution that meets the requirements of laws and administrative regulations but does not meet the requirements of the articles of association of the legal person cannot be considered to have been reasonably examined by the relative. In other words, the restrictions of laws and administrative regulations are only to guide the counterparty's review attention, and the real reasonable review should also comply with the company's articles of association.
In addition, according to the above, the relative's review obligation in reasonable review is not limited to the formal integrity of the document, to a certain extent, we need to pay attention to the consistency of the resolution with laws, administrative regulations, articles of association and other documents, that is, whether the shareholders participating in the voting are the shareholders specified in the articles of association, whether the number of voting members meets the requirements, whether the number of voting members meets the provisions of the articles of association, etc., so the articles of association of the company should also be the object of examination of the relative party.
(3) register of shareholders, notice of meeting, minutes of meeting, votes, etc.
The register of shareholders is a document that determines the identity of the company's existing shareholders and is the standard for determining whether the voting shareholders are qualified; the notice of the meeting, the minutes of the meeting, the expression of votes, etc. are the basic information to judge whether the voting procedure is legal and meets the minimum voting requirements, so they should also be the object of reasonable examination.
content (II) reasonable review
(1) Review whether the resolution was made by an authority
the reason why the legal representative overstepped his authority was that he did not obtain the resolution or decision of the competent authority, so for the counterpart, the first job after obtaining the resolution was to review whether the resolution was made by the competent authority, otherwise, the follow-up review will become meaningless.
(2) Review whether the voting ratio meets the requirements
reviewing the voting rights ratio is the basis for judging whether the resolution is valid in form. the counterpart should review whether the voting rights ratio meets the minimum requirements of laws, administrative regulations and articles of association in accordance with the provisions of laws, administrative regulations and articles of association, it is specifically divided into two aspects: the minimum voting rights requirement for participation in voting and the minimum voting rights requirement for the adoption of resolutions.
(3) Review the appearance of the articles of association, the signature of the register of shareholders and the signature of the resolution
the articles of association and the register of shareholders are documents that record the identity information of the shareholders of the company. when the counterpart examines the signature of the resolution, the first step is to check whether the shareholders signing the resolution are the shareholders recorded in the articles of association and the register of shareholders, the second step should be to verify the consistency of the resolution with the signatures on the statute and roster, where it is sufficient to verify that the signatures are highly similar, and there should be no requirement to ensure that they must be consistent.
(4) Review meeting proceedings for legality and compliance
laws and administrative regulations have basic provisions on the procedures of the company's resolution meeting, and the company's articles of association may also stipulate stricter agreements. Therefore, the counterpart should check whether the relevant meeting procedures meet the requirements of laws, administrative regulations and articles of association, but only the formal requirements can be met during the review. For example, the time limit between the meeting time and the notice of the shareholders' meeting shown on the document can meet the requirements, and the counterpart should not be required to check the real meeting notice time and the real meeting time.
(5) Review whether the amount of guarantee exceeds the individual amount limit of the articles of association
the external guarantee matters belong to the matters that need to be decided by the shareholders' meeting or the board of directors as clearly stipulated in article 16 of the company law. based on the guarantee behavior, the reasonable examination objects of the relative party should include the articles of association, therefore, the provisions of the articles of association of the company on the amount of the guarantee should be known, so whether the amount of the guarantee exceeds the single limit, it should be subject to the obligation of review. As for the limit on the total amount of the guarantee, although the relative may be aware of the total amount limit, the relative cannot be required to examine whether the total amount of the guarantee is exceeded because the cost of reviewing the amount of the guarantee of the legal person and all other third parties is too high and even involves trade secrets that cannot be obtained.
(III) degree of reasonable scrutiny
reasonable examination should consider not only the degree of overstepping the authority of the legal representative, the transaction efficiency, but also the examination ability of the counterpart and the economic cost of the examination, as long as the relative person has fulfilled the duty of care and prudence of a good third person. For example, when examining whether the resolution is made by the authority, as long as it is judged according to the articles of association that the resolution is within the scope of the authority of the institution, it should not be judged whether the composition of the institution is legal and whether the members are legal, such as whether the directors are qualified to hold office. When examining the proportion of voting rights, as long as the shareholders (directors) who formally participate in the voting and the shareholders (directors) who pass the voting meet the requirements, it should not be required to check whether there are hidden shareholders, nor should the counterpart be required to judge whether the voting involves matters, the legality of the content itself, and whether it harms the interests of the third party. When comparing the signature of the articles of association or the register of shareholders with the signature of the resolution, as long as the two signatures look highly similar on the surface, the signature of the register of shareholders and the signature of the resolution cannot be excessively criticized, let alone the counterpart judge the authenticity, even if the handwriting or seal of the later appraisal resolution is false, it cannot be concluded that the counterpart has not fulfilled the obligation of reasonable examination.
Other factors to be considered for 3. reasonable review obligations
(I) transaction significance
The matters overstepped by the representative can be divided into general matters and major matters according to the size of the transaction amount or the degree of influence on the company. Some scholars believe that different matters have different degrees of impact on the company, the degree of disclosure is also different, and the determination of the goodwill of the relative person also has different effects. 8 indeed, for example, for the provision of external guarantees stipulated in article 16 of the company law, the law requires the counterpart to pay different attention to the guarantee of 0.1 billion yuan and the guarantee of 1 million yuan. major transactions inevitably require the counterpart to fulfill stronger prudent examination obligations. In other words, if the relative fails to give reasonable and careful attention and attention to such a major transaction, or even ignores it, its rights are not worthy of legal protection.
(II) counterpart identity
the identity of the counterpart also affects its reasonable examination obligation. different identities may have different examination capabilities. for ordinary natural persons, it is not immune to high expectations that they are required to fully meet the requirements in accordance with the requirements of laws and administrative regulations. Some scholars argue that a distinction should be made between businessmen and non-businessmen, and that the duty of care of businessmen is heavier than that of non-businessmen. 9 The author believes that although no one can be exempted from the restriction because he does not know the law, any subject should be treated fairly by the law. However, the obligation of reasonable examination itself contains the connotation of the relative's ability to examine, there is no doubt that different subjects must have differences in the ability to examine, for this subject belongs to reasonable examination, for the other subject is not necessarily reasonable. Therefore, the difference between the relative should also be a reasonable view, and as a consideration.
(III) legal identity
The identity of a legal person also has an impact on determining reasonable review obligations. For example, listed companies are public companies, and many information and data are open and transparent. At the same time, the acquisition cost is lower and the efficiency will be higher, compared to the general limited company. When the same contract is signed with a public company, the reasonable review requirements for the counterpart will be higher.
(IV) transactions
the number of transactions will also affect the reasonable review obligation. for both parties of the first transaction, the review ability is weak because the opposite party knows less about the legal person itself at this time. For both parties who have traded for many times, theoretically, the counterpart knows more about the situation of the legal person or the representative authority of the legal representative. Compared with the first transaction, he is more familiar with the shareholders' meeting, the authority of the board of directors, the composition of personnel and the scope of authority of the legal representative. He should have stronger examination ability and better understand the scope of authority of the legal representative, A stronger duty of care should also be borne on the change of the legal representative when the representative is ultra vires. For example, the previous guarantee contract between the legal person and the relative party was less than 1 million yuan, and it was always passed by the board of directors. Suddenly, a certain transaction was suddenly raised to 5 million yuan. The relative party should pay attention to such changes and submit it to the shareholders' meeting for resolution.
4.
Article 16 of the Companies Act (I)
Article 16 of the company law stipulates: "if a company invests in other enterprises or provides guarantee for others, it shall be decided by the board of directors or the shareholders' meeting or the shareholders' general meeting in accordance with the provisions of the articles of association; if the articles of association of the company have a limit on the total amount of investment or guarantee and the amount of a single investment or guarantee, the limit shall not be exceeded. Where a company provides a guarantee for the shareholders or actual controllers of the company, it must be resolved by the shareholders' meeting or the general meeting of shareholders." For a long time, this clause and Article 50 of the Contract Law 10 have jointly aroused academic discussions on the nature and effectiveness of the legal representative's ultra vires conclusion of contracts, and form the "internal relationship theory", "normative nature identification theory" and "representative power restriction theory" dispute 11, and finally come to the conclusion that the ultra vires guarantee contract is invalid, or the validity of the guarantee contract is to be determined, these are not within the scope of this article, so they will not be described in detail. However, there is no doubt that the company's investment in other enterprises or the provision of guarantees for others has clearly belonged to the legal restrictions on the legal representative's authority. When the relative and the legal person sign such contracts, they should bear the corresponding reasonable review obligations.
Article 59 of the Companies Act (II)
Article 59 of the Companies Act 12 defines the terms of reference of the shareholders' meeting, among them, items (I) to (IV) and (VIII) of the first paragraph of this article belong to internal management matters and do not involve restrictions on the external representation of the legal representative and the issue of the relative person. Item (IX) belongs to the bottom-up clause and belongs to the content stipulated in the articles of association of the company. It does not belong to the restriction of the representation of the legal representative clearly stipulated by laws and administrative regulations. However, the first (V) (VI) (VII) that when the legal representative signs the corresponding contract with the outside world, he must obtain the corresponding resolution. For example, if a legal person increases its registered capital and signs a Capital Increase Agreement with its counterpart, the Capital Increase Agreement shall not take effect for the company without a resolution of the shareholders' meeting to pass the capital increase. In particular, the issuance of bonds can authorize the board of directors to make a resolution. Therefore, when issuing bonds, if the company's shareholders will delegate the authority to issue corporate bonds to the board of directors, the board of directors can make a resolution when signing an agreement to issue bonds.
Article 67 of the Companies Act (III)
Article 67 13 sets out the terms of reference of the board of directors, among them, the (I) to (VII) and (IX) of the first paragraph of this article are internal management matters, and do not involve the restriction of the legal representative's external representation and the issue of the relative person. The first (X) is a bottom-up clause, which is stipulated in the company's articles of association or the shareholders meeting. Granted, it does not belong to the restriction of the legal representative's representation clearly stipulated by laws and administrative regulations. Only in item (VIII), it is the authority of the board of directors to decide on the appointment of the manager and his remuneration, or to appoint the deputy manager, the person in charge of finance and his remuneration on the basis of the manager's nomination. If, in accordance with the provisions of Article 20, paragraph 1, of the Partial Interpretation of the General Principles of Contracts, the manager, deputy manager or financial officer signs an employment contract with the company, and if the resolution of the board of directors is not obtained, the validity of the contract is problematic.
Article 116, paragraph 3, of the Companies Act, (IV)
14 is actually a refinement of the powers and decision-making requirements of the shareholders' meeting in (II) with Article 59 of the Company Law, so I won't repeat it here.
Article 135 of the Companies Act (V)
Companies Act, Article 135 15 is aimed at the situation that a listed company purchases or sells major assets within one year or provides guarantees to others exceeding 30% of the total assets of the company, it must be subject to a special resolution of the shareholders' meeting. The counterpart who signs the above-mentioned relevant contract with the listed company shall bear the corresponding reasonable review obligation, especially when the one-time transaction meets the above-mentioned standards.
(VI) other provisions
The above list does not cover all situations of laws and administrative regulations, the acquisition of listed companies as stipulated in Article 62 of the Securities Law Article 81 of the Securities Law stipulates that major events such as the disposal of major assets involve the following of certain legal procedures and the resolution of the shareholders' meeting. In practice, all kinds of transactions are complicated. "Partial Interpretation of the General Principles of Contracts") The norm in Article 20, paragraph 1, is to presume that the counterpart is aware of the restrictions on representation clearly stipulated by laws and administrative regulations, and therefore should fulfill the obligation of reasonable review. For the same purpose, if the restriction on the representation of the legal person to the legal representative is already known or should be known to the relative, the relative shall also bear the obligation of reasonable examination, which is also the second paragraph of Article 20 of the Partial Interpretation of the General Principles of Contracts, except that the legal person or unincorporated organization proves that the relative knows or should know the restriction." The meaning of the topic.
5. Articles of Association or Internal Organizations Reflections on the Effectiveness of Restrictions on Representation by Legal Representatives
article 20, paragraph 2, of the partial interpretation of the general rules of contract stipulates that "the matters involved in the contract do not exceed the representative authority of the legal representative or the person in charge stipulated by laws and administrative regulations, however, if the person claims that the contract is effective against the legal person or unincorporated organization and that it is liable for breach of contract, the people's court shall support it in accordance with the law, beyond the restrictions on the right of representation imposed by the articles of association or authority of the legal person or unincorporated organization. However, except where a legal person or an unincorporated organization provides evidence that the counterpart knew or should have known of the restriction." The content of this paragraph excludes from the obligation of reasonable examination the statutory restrictions on the representation of legal representatives by the articles of association of legal persons and unincorporated organizations and the authority, unless the counterparty is or should have been aware of the restrictions. Compared with the first paragraph of Article 20 of the Partial Interpretation of the General Principles of Contracts, its logic seems to be: the legal restrictions stipulated by laws and administrative regulations are based on the publicity of the law, so it is presumed that the relative is aware of the restrictions, so if the relative fails to take the initiative to prove that he has fulfilled the obligation of reasonable examination, it will not be protected. As for the voluntary restriction formed by the internal organization of the enterprise, such as the articles of association or the authority, because it is an internal matter and is not public, the relative cannot be required to bear an excessive duty of care, so it is presumed that the relative does not know the restriction, unless the legal person can prove that the relative knows or should know the restriction. This logic is understandable if it is only for the content resolution, but it is open to question if it includes the articles of association of legal persons. As previously stated in the section on the Articles of Association of the Subject of Reasonable Examination, the restrictions on representation by laws and administrative regulations only attract the attention of the counterparty to the examination, and to truly achieve reasonable examination, it is also necessary to examine whether the resolution complies with the provisions of the Articles of Association. At the same time, the articles of association also have a certain degree of publicity. Article 61 of the Civil Code stipulates that "the person in charge of civil activities on behalf of a legal person shall be the legal representative of the legal person in accordance with the provisions of the law or the articles of association of the legal person.", Since the law has clearly stipulated that the legal representative should engage in civil activities in accordance with the articles of association of the legal person (I. e., the articles of association may impose special restrictions on the representation of the legal representative), should the counterparty as a counterparty review the articles of association of the legal person before the transaction? In other words, can a person who does not review the articles of association of a legal person be called good faith? In view of this, the author believes that the legal effect of the company's articles of association on the restriction of representation without the obligation of reasonable review should be consistent with the legal effect of the restrictions of laws and administrative regulations in Article 20, paragraph 1, of the Partial Interpretation of the General Principles of Contracts without the obligation of reasonable review.
6. epilogue and remainder
the relative review obligation has gone through the dispute between formal review obligation and substantive review obligation without review obligation, the process of assuming the obligation of formal examination and then the obligation of reasonable examination in most cases. Reasonable review obligation is a kind of review obligation between formal review and substantive review. Therefore, the obligation of reasonable examination can not be exacting on the relative, but it can not be a mere formality. Reasonable review obligations should be based on requiring the counterpart to review the form of documents, and to a certain extent, pay attention to the consistency of resolutions with laws, administrative regulations, articles of association and other documents. The obligation of reasonable review can be defined in terms of the three dimensions of the object of review, the content of the review, and the degree of review, where the object of review includes the resolution of the authority or the decision of the executive body, the articles of association, the register of shareholders, the notice of the meeting, the minutes of the meeting, the voting votes, etc, the review includes examining whether the resolution was made by an authority, whether the percentage of voting rights meets the requirements, whether the signature of the register of shareholders is consistent with the appearance of the signature of the resolution, whether the convening procedure is legal, in accordance with the articles of association, and whether the amount of security exceeds the limits of the articles of association. The degree of review should consider not only the degree of dominance of the legal representative's ultra vires behavior, but also the economic efficiency, the relative's ability to review and the economic cost of the review, the degree of review should not include the authenticity of the review resolution itself (including the authenticity of the signature), the legality of the content of the resolution. In judicial practice, other factors need to be considered to determine the reasonable review obligation of the relative, including the significance of the transaction, the identity of the relative, the identity of the legal person, the number of transactions, etc. The provisions of the current laws and administrative regulations concerning the obligation of reasonable examination of the counterpart mainly include articles 16, 59, 67, 116, paragraph 3, 135 of the Company Law, and articles 62 and 81 of the Securities Law.
after defining the standard of reasonable examination obligation of the counterpart, according to the provisions of paragraph 1 of article 20 of the partial interpretation of the general rules of contract, the legal effect of the relative's failure to fulfill the obligation of reasonable examination is that the ultra vires contract "does not have effect" on the legal person and the illegal organization. As for the non-effect because the contract is "invalid" or "the effect is to be determined", it is still controversial, and this is left to be discussed later.
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Notes:
1. Wang Liming: On the reasonable review obligation of the counterpart in the ultra vires representative, article 20 of the Contract Interpretation is the center, "Chinese and Foreign Law" 2024 No. 1
2. yin qiushi: the connotation definition and system orientation of legal representative, law science, no 2, 2017, pages 14-27
3. Li you: reasonable review obligation of trading counterparts in company guarantee & mdash; Based on the analysis of 458 documents, politics and Law, No. 5, 2018
4. See Supreme People's Court 2017 Civil Judgment No. 184
6. Gao Shengping: the review obligation of the counterpart in the company guarantee-based on the analysis and development of the differences in the supreme people's court judgment, the forum of political science and law, vol. 35, no 5, september 2017
7. Gao Shengping: on the legal effect of the company's legal representative's ultra vires guarantee, modern law no 6, 2021
8. yuan bihua: on the identification of bona fide counterparts in the legal representative's ultra vires representative, social science, no 7, 2019
9. yuan bihua: on the identification of bona fide counterparts in the legal representative's ultra vires representative, social science, no 7, 2019
10. article 50 of the contract law, a legal representative or person in charge of a legal person or other organization enters into a contract beyond his authority, except that the opposite person knows or should know that he exceeds his authority, the representative act is valid.
11. Gao Shengping: the interpretation basis of the judgment paragraph on the validity of the company's legal representative's ultra vires guarantee & mdash; Based on the analysis and development of the differences in the judgment of the Supreme People's Court, comparative Law Research, No. 1, 2019
12. Article 59 of the Company Law stipulates that the shareholders' meeting shall exercise the following powers:
(I) the election and replacement of directors and supervisors, and determine the remuneration of directors and supervisors;
(II) to consider and approve the Board's report;
(III) review and approve the report of the Supervisory Board;
(IV) review and approve the company's profit distribution plan and loss recovery plan;
(V) resolution to increase or decrease the company's registered capital;
(VI) resolution on issuance of corporate bonds;
(VII) resolution on merger, division, dissolution, liquidation or change of corporate form;
(VIII) Amending the Articles of Association;
(IX) other functions and powers specified in the Articles of Association.
The shareholders' meeting may authorize the board of directors to make a resolution on the issuance of corporate bonds.
13. article 67 of the company law a limited liability company shall have a board of directors, unless otherwise provided in article 75 of this law.
The Board of Directors exercises the following powers:
(I) the shareholders' meeting and report the work to the shareholders' meeting;
(II) implement the resolution of the shareholders' meeting;
(III) determine the company's business plan and investment plan;
(IV) to formulate the company's profit distribution plan and loss recovery plan;
(V) formulate plans for increasing or decreasing the company's registered capital and issuing corporate bonds;
(VI) to formulate plans for merger, separation, dissolution or change of company form;
(VII) determines the settings of the company's internal management structure;
The (VIII) decides to appoint or dismiss the manager of the company and his remuneration, and decides to appoint or dismiss the deputy manager, the person in charge of finance and his remuneration according to the manager's nomination;
(IX) the company's basic management system;
(X) other powers stipulated in the articles of association or granted by the shareholders' meeting.
article 116, paragraph 3, the shareholders' meeting will make a resolution to amend the articles of association, increase or decrease the registered capital, and the company will merge, divide, dissolve or change the form of the company, it shall be adopted by more than 2/3 of the voting rights held by the shareholders present at the meeting.
article 135 if a listed company buys or sells major assets or provides guarantees to others within one year, the resolution shall be made by the shareholders' meeting 30% the amount of the company's total assets, and approved by more than 2/3 of the voting rights held by the shareholders present at the meeting.
