To be a legal representative in Mexico, you must meet the following requirements: To be appointed as a legal representative, the person must be a local national or a foreigner with the legal right to live and work in the country. The power of attorney granted to the legal representative must cover all usual business requirements, such as: The legal representative acts as the „legal face“ of the company and is the signatory of all operational activities of the company; In return, they have a legal responsibility to ensure the proper functioning and reputation of the company. In this regard, it should be noted that due to the legal need to stamp an official document, it may be difficult to dismiss an uncooperative or „corrupt“ legal representative (for example, if he refuses to sign his own dismissal document). According to the World Bank`s Doing Business 2020 report, the start-up process in Mexico can take around 8.5 days. Another option is to hire a Chinese employee. In this case, the employee is involved in the local market, but does not sufficiently orient himself towards the culture and policies of the company, etc. It is essential to ensure that the powers conferred on the legal representative are sufficient to enable him or her to perform the professional functions required of him or her and, on the other hand, are appropriately limited to ensure that the risk is minimised. Only a national or foreign citizen who has a NIE (Alien Identification Number) may be designated as the legal representative. Important: If you benefit from PEO, this person is the legal representative of the PEO company you work with, but on Malt you will need to provide your own personal data and proof of identity. The business advisory services offered by LEIALTA include legal and tax representation, including: The selection of an appropriate and qualified legal representative with such extensive powers and potentially unlimited liability is therefore extremely important.
Any company registered in Spain must have a legal representative, i.e. a person acting on behalf of the company in the exercise of his functions and powers in accordance with the law and the company`s articles of association. In other words, a legal representative is a person appointed to act on behalf of the company. This means that the legal representative has the right to conclude contracts or conduct business on behalf of the company and the company is responsible for the consequences. Conclude and execute the actions and contracts necessary for the development of all the activities of the company it represents. The legal representative of a company carries out civil law activities on behalf of the company in accordance with the law or its articles of association and assumes the duty of loyalty and diligence towards the company. In the day-to-day performance of his duties, the legal representative mainly runs the risk of assuming civil liability for damages and possible criminal liability for breaches of office and operational errors. When a legal representative is appointed or elected, powers are usually granted by an officially notarized document (nominally in the company`s articles of association).
According to relevant Chinese laws, a legal representative who fails to comply with his or her duty to manage safety in the workplace and causes serious loss or other serious consequences shall be held criminally liable in accordance with the relevant provisions of the Criminal Code. Natural persons or companies or firms may be appointed as directors or legal representatives, provided that such companies are represented by a natural person for the performance of their duties. A fundamental part of the incorporation process and a reason for the importance of consulting legal experts to define the power and control of the legal representative. Another aspect that makes the power of the legal representative almost unlimited is the possibility of appointing the legal representative as chairman of the board of directors or sole director of the company (if the board of directors consists of one person). These three positions are mandatory when setting up a business in China, so the business cannot function without them. While new companies in China would find it easier and less problematic to have one person in charge of two positions, it`s wise to keep in mind that it might be too risky to put the powers of both roles in the hands of a single employee. Legal representation is granted to the directors or directors of the corporation they represent. This legal representative is vested with a power of attorney and his powers are limited to the exercise of the acts necessary for the proper administration of the company. A legal representative is a person who represents and acts on behalf of the company. This person is authorized to perform several processes, in addition to assuming obligations and the ability to make decisions for the benefit of the company. In accordance with company law and other relevant regulations, only a person with full civil capacity who does not have significant personal debts and who is not under investigation for specific economic crimes or who has served a certain period after serving his full sentence may be eligible as a legal representative. The legal representative and the company are essentially the same thing.
The Company is bound by the actions of the legal representative, so it is the sole body responsible for the correct or negligent conduct of the representative. In addition, actions that go beyond the powers of the representative may also impose sanctions on the company. In order to avoid a fine, a third party who contacts the legal representative has the right to claim that he has acted inappropriately. Since the third party may not know the company`s articles of association and not have access to its documents, he does not know when and how the authority of the legal representative was exceeded. At the same time, in case of violation of the rules, the legal representative will be held liable. The applicant has the right to request that the legal representative of the indebted company be prevented from leaving the country and engaging in conspicuous consumption until the company has fulfilled its debt obligations specified in the valid legal document. If the legal representative of a wholly foreign-owned company does not pay taxes in China, he must pay any taxes due and late fees or provide guarantees before leaving China. Otherwise, the tax administration may notify the managing authority of departures to stop his departure. The legal representative leaves his mark, in some cases literally, on everything that reflects the objectives of the company. The tasks of the legal representative therefore include, inter alia, securing the company`s assets; Power of attorney on behalf of the Company; sign contracts and agreements; Filing of reports and legal representation with Chinese regulators.
Due to the great power given to the position, the selection of the legal representative when registering a company in China is an important task that should be carefully considered and observed. It is important to know that Chinese company law does not require that the legal representative be necessarily Chinese or reside in China, so there are a variety of options to choose from. The natural choice of foreign investors when appointing a legal representative is to select an existing employee, usually from the parent company, who knows the corporate culture, identifies with its values and is trustworthy. However, such an employee may be inexperienced and unfamiliar with the Chinese market and may face many cultural, linguistic and other barriers. In addition, the legal representative must travel to China to take important steps, such as opening a bank account, closing the business, and taking legal action. It is also important to note that in times of crisis, Chinese authorities delegate responsibility to the legal representative, and it is possible that a legal representative who comes from abroad to resolve the crisis may be detained in China until the crisis is over, which can take months in some circumstances. Therefore, it is important that when choosing a legal representative, the focus is on confirming the powers granted and ensuring that the selected person is a trusted partner, employee and/or contact of business owners. Appointing a legal representative for a company is common for companies and the role they play can be varied, but it is important to do it correctly. With regard to civil liability, if the legal representative of a company concludes a contract outside his authority, but the other party does not know or cannot know his breach of power, the contract is still valid. However, the Company may claim civil compensation from its legal representative for the damage suffered. Under an operating and management contract concluded between the legal representative and the Company, the legal representative is liable for breaches of contract if he does not fulfill the contractual obligations.
Since the legal representative acts as the „face“ of the company before all Spanish authorities, liability is not limited to tax matters. From a legal point of view, the legal representative is also responsible for labour and social security matters as well as compliance with municipal obligations, such as business license.