A legal representative is the responsible person who exercises powers on behalf of a company in accordance with law or the company's articles of association, and plays a central role in corporate operations. The pre-amendment Company Law focused primarily on the appointment of legal representatives while providing no clear exit mechanism. In practice, nominee legal representatives, fraudulently registered legal representatives, and voluntary resignations were commonplace, frequently giving rise to legal disputes. Removal of a legal representative refers to the process by which a legal representative seeks, through civil litigation or administrative channels, to change or remove their registration as legal representative. Before the 2023 amendment, some courts declined to accept such cases as civil matters on the grounds that changing a company's legal representative fell within the domain of corporate autonomy. The 2023 amendment introduced a formal resignation mechanism for legal representatives, which in turn provides a legal basis for removal proceedings.

I. Provisions on Resignation of Legal Representatives Under the New Company Law

Article 10, paragraphs 2 and 3 of the Company Law provide that where a director or manager serving as legal representative resigns, they shall be deemed to have simultaneously resigned as legal representative. Upon such resignation, the company must designate a new legal representative within thirty days. Article 23 of the Implementing Measures for Company Registration Administration (amended 2024) further provides that the company registration authority shall, upon receipt of an enforcement notice from a people's court, publicly disclose removal information through the National Enterprise Credit Information Publicity System.

Article 1 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (Consultation Draft), published in 2025, addresses the handling of legal representative resignations and removals in litigation, and helps clarify the nature of this cause of action. The entry into force of the new Company Law marks a shift in the legal representative removal regime from "corporate autonomy" toward "moderate judicial intervention."

II. Elements of a Claim for Removal of Legal Representative

(i) Termination of the Agency Relationship

Article 11 of the Company Law provides that civil acts performed by a legal representative in the name of the legal person shall bind the legal person. A natural person serves as legal representative pursuant to a mandate from the company, and the legal relationship between them is one of agency. Under Article 933 of the Civil Code, either party may terminate the agency relationship, thereby ending the natural person's service as legal representative. In practical terms, resignation by a sitting legal representative constitutes a declaration to the company terminating the agency relationship. A nominee legal representative likewise stands in an agency relationship with the company — albeit without authority to conduct company affairs — and may equally resign the position.

(ii) Severance of the Substantive Connection

Under Article 10 of the Company Law and Article 81 of the Civil Code, appointment as legal representative requires that the company confer the position and grant authority to conduct company affairs. Courts in practice describe this authorization and management relationship as a substantive connection, which must exist between the legal representative and the company.

A nominee legal representative, having no actual authority to represent the company in its affairs, lacks such a substantive connection and should not serve as legal representative. In one company registration dispute, the court held that because the legal representative held no shares, did not participate in operations or receive remuneration, and had been continuously employed elsewhere for many years, no substantive connection with the company existed and the conditions for serving as legal representative were not met. (Yixing City People's Court, Jiangsu Province, (2021) Su 0282 Min Chu No. 10454; People's Court Case Database No. 2024-08-2-264-002)

(iii) Exhaustion of Internal Remedies

The Company Law is an organizational statute, and autonomy is its foundational governance principle; internal corporate disputes should first be resolved through the company's own governance mechanisms. Judicial intervention in internal corporate governance must be restrained and necessary, and removal proceedings are no exception. All five cases in the People's Court Case Database in which courts upheld a change of legal representative or supervisor registration held that external judicial relief is available only after the legal representative has exhausted all internal remedies without success. (See, e.g., Supreme People's Court, (2021) Zui Gao Fa Min No. 7049; People's Court Case Database No. 2023-08-2-264-002)

For nominee and resigning legal representatives, exhausting internal remedies means, in particular: (1) notifying the company of the resignation; (2) if the company fails to register a change of legal representative within thirty days, requesting that the board of directors / executive director or the board of supervisors / supervisor convene a shareholders' meeting, or requesting that the chairman or vice-chairman convene a board meeting, to replace the legal representative and update the registration in accordance with the articles of association; and (3) if the nominee legal representative holds or represents shareholders with one-tenth or more of the voting rights, proposing or independently convening a shareholders' meeting to consider the replacement. For a fraudulently registered legal representative, no internal remedy is required, as they are not a member of the company.

III. Procedural Options for Removal

(i) Administrative Procedure

A fraudulently registered legal representative may seek removal through an administrative application. Article 40 of the Regulations on the Administration of Market Entity Registration provides that where registration was obtained by submitting false materials or other fraudulent means concealing material facts, any natural person, legal person, or other organization adversely affected may apply to the registration authority for cancellation of the registration. Accordingly, a fraudulently registered legal representative has the right to apply to the registration authority for cancellation of their registration.

(ii) Civil Litigation

Both fraudulently registered and nominee legal representatives may seek removal through civil litigation. The legal representative must name the company as defendant and bring an action for change of company registration before the court of the company's domicile, requesting a judgment ordering the company to file for a change of legal representative.

The plaintiff bears the burden of proving the following:

1. Termination of the agency relationship — that the plaintiff has notified the company of their      resignation, or that the company registered the plaintiff as legal      representative without their knowledge or consent;

2. Absence of a substantive connection      — that the plaintiff no longer holds any directorial or managerial      position and does not participate in the company's actual operations;

3. Exhaustion of internal remedies —      for example, a nominee legal representative may demonstrate that they      notified the company of their resignation and attempted to effect a change      of registration through board and shareholders' meetings, but that the      company failed to fulfill its obligation to update the registration.

(iii) Limitations on Removal

Removal must not prejudice the rights of others, particularly where the purpose is to evade debts or circumvent enforcement restrictions such as high-consumption prohibitions. Article 1 of the Consultation Draft Interpretation provides that where laws or administrative regulations contain special provisions on resignation or departure of a legal representative, the court may dismiss the claim in accordance with such provisions. Article 20 of the Implementing Measures for Company Registration Administration provides that where there is evidence that an applicant is manifestly abusing the independent legal personality of the company and the limited liability of shareholders — by changing the legal representative, shareholders, or registered capital, or by deregistering the company — to fraudulently transfer assets, evade debts, or circumvent administrative penalties in a manner that may harm the public interest, the registration authority shall refuse to process the relevant registration or filing, and shall revoke any registration already completed.

IV. Conclusion

The relationship between a legal representative and a company is a composite of appointment and agency obligations. The conditions for holding the position, and the legal consequences of civil acts performed in the company's name, both indicate that a legal representative should play a substantive management role — making the widespread practice of nominee legal representatives a departure from the very purpose of the institution. For companies in normal operation, a complete exit mechanism should be available when a legal representative's management authority is terminated by resignation or removal. Where internal procedures afford no relief, removal proceedings provide an effective remedy. In adjudicating such cases, courts should be attentive to the public interest and the rights of third parties, and carefully examine whether removal is being sought as a means of evading debts, escaping liability, or harming the legitimate interests of others — so that the new regime established by the amended Company Law may better serve the balanced protection of companies, legal representatives, and third parties alike.