Law

New employees mutate into 'senior executives', wary of fake promotions and real' blame '

2025-06-19   

New employees suddenly become "directors, senior executives, and supervisors", be wary of fake promotions that really "take the blame". Judges remind us to remember "acting within our capabilities" and "unifying rights and responsibilities", and not to ignore legal risks for the sake of false positions. The situation of new employees serving as "directors, senior executives, and supervisors" (company directors, senior management personnel, and supervisors) under the guise of false positions is increasing year by year, and new employees in the workplace are prone to becoming the "scapegoat" for some companies' internal management loss of control and "golden cicadas shedding their shells". It is necessary to raise legal awareness. Has the newly hired employee transformed into a 'senior supervisor'? Be careful, this may not be a pie but a trap. Recently, the People's Court of Fangshan District, Beijing, announced to the public the trial status of cases involving internal governance of companies and disputes with employees since 2022. The court has found that the number of newly hired employees serving as "directors, senior management personnel, and supervisors" (company directors, senior management personnel, and supervisors) under the guise has been increasing year by year. New employees with a lack of legal awareness in the workplace are prone to becoming the "scapegoat" for some companies' internal management loss of control and "golden cicada shedding its shell". In order to help the public prevent such legal risks, the court has published relevant typical cases. For newcomers who are about to enter the workplace and those who have already entered the workforce, the judge issued a reminder - it is necessary to raise legal awareness and not become a "nominal shareholder" of the company just because of others' words. Otherwise, if the company experiences poor management and defaults on debts, even if it is just a nominal "director, senior supervisor", it may still be burdened with huge debts. 26 year old Wang, who was supposed to be the legal representative, was "restricted from high consumption" shortly after starting work, but suddenly realized that he had been "restricted from high consumption" and couldn't even purchase plane tickets. Upon investigation, it was discovered that the company where Wang used to work had become a dishonest debtor due to defaulting on loans owed to others, and Wang was the legal representative of the company. So Wang filed a lawsuit with the court, claiming that he was only a nominal legal representative, did not participate in the company's operation and management, and had already resigned, requesting the court to revoke his business registration as the legal representative of the company. Wang claimed that after graduating from university, he worked as a manager assistant in an education company for less than half a year. The HR manager approached him and said that he needed his ID card to assist in handling company business. I handed over my ID card to the other party and cooperated in signing several documents. Not long after, I discovered that I had become the legal representative of an education consulting company under the company. Wang quickly contacted the company to inquire about the relevant situation. The company leader stated that this education consulting company is just a shell company and does not engage in any business. Mr. Wang is just putting on a name and saying 'it's nothing'. Wang didn't take it seriously because he wanted to continue working in the company and didn't understand the relevant legal regulations. After working for two years, Wang resigned and went to another company due to the company's downturn. It wasn't until I realized that I couldn't purchase plane tickets that I realized I had become a dishonest debtor due to hanging my name. After the court trial, it was found that from the perspective of the original intention of establishing the company system, the executive director, as a senior management personnel of the company, is the executing authority of the decisions made by the shareholders' meeting and the actual manager of the company; The general manager manages the daily operations of the company and is the executing agency of the company; The legal representative represents the will of the company externally and engages in civil activities on behalf of the company. In this case, Wang was only an ordinary employee of the company, appointed as the manager of an education consulting company, and had resigned for more than two years. He no longer had any substantial interest relationship with the education consulting company. The defendant company's negligence in electing the corresponding position will bring legal risks to Wang due to the "name hanging". Therefore, the court supports Wang's claim that the company should assist in removing the legal representative. Zhai Xin, assistant judge of Fangshan Court, reminded that if a newcomer in the workplace accidentally becomes the legal representative of the company, they can negotiate with the company to change the business registration, and pay attention to keeping the evidence materials during the negotiation and communication process. If the negotiation fails, one can file a lawsuit to change the company registration with the court, requesting to remove the registration items as the legal representative of the company, and submit their communication records, labor contracts, and other materials as evidence. Newcomers in the workplace suddenly encountered a "huge debt from heaven", and Wang removed his rightful identity through litigation, but in another case, Xiao Zhao, who was listed as a shareholder, was not so lucky. Company A owes the plaintiff B the payment for the goods. After the dispute is tried by the court, it enters the execution procedure. Due to the lack of enforceable property of Company A, Plaintiff B sued five shareholders of Company A, including Xiao Zhao, to the court, demanding that shareholders Xiao Zhao and others bear supplementary compensation liability for the unpaid portion of Company B's debt within the scope of the registered capital that has not been paid in. Xiao Zhao, who is just a newcomer in the workplace, said that he is an ordinary employee. When he first joined the company, the boss asked him to be a nominal shareholder. I do not agree to assume the responsibility of supplementing and repaying the company's debts within a capital contribution of over one million yuan. After trial, the court found that according to the industrial and commercial archives, Xiao Zhao and other defendants are all shareholders of Company A and have not actually paid their capital. The plaintiff B has applied for compulsory enforcement of the debt to the court, but due to the fact that Company A has no property available for enforcement, the case has been terminated in this enforcement procedure. This situation can be considered that Company A is unable to repay its due debts and clearly lacks the ability to repay them, and has already had bankruptcy reasons but has not applied for bankruptcy. Therefore, all shareholders, including Xiao Zhao, should bear supplementary compensation liability for the portion of debt that Company A cannot repay to Company B within the scope of unpaid capital. Newcomers in the workplace must take good care of their identity documents and not become 'nominal shareholders' of the company just because of the words of their boss or others. ”Zhai Xin said that if an identity card is lost and registered as a shareholder by someone with malicious intent, one can apply to the industrial and commercial registration department to change the registration while reporting to the police, or file a lawsuit with the court to remove the relevant false identity. In another case, a shareholder named Zhao of a certain company discovered that 500000 yuan of the company's registered capital had been embezzled, and therefore sued the company's legal representative Zhang (executive director and general manager), supervisor Wang, shareholder Yuan, and others on behalf of the company, demanding that they each bear corresponding responsibilities. The accused Wang claimed that he should not be held responsible because he was just an ordinary employee of the company. After joining the company, he was appointed as a supervisor according to the company's requirements, but he never participated in the company's management. After investigation, it was found that shareholders such as Yuan had indeed withdrawn their capital contributions. After trial, the court found that Wang, as the supervisor of the company since its establishment, has supervisory responsibility for the company's affairs such as the arrival of registered capital. However, Wang did not prevent the company's shareholders from withdrawing their capital, nor did he claim to recover it afterwards. He did not fulfill his obligations of loyalty and diligence and had obvious faults. Therefore, the court supports the company's lawsuit request for Wang to assume joint and several liability for the capital withdrawn by other shareholders. The judge stated that directors, supervisors, and senior management personnel, as managers of the company's business operations and affairs, have a duty of loyalty and diligence towards the company, and have a responsibility and obligation to maintain the company's capital adequacy. According to the relevant provisions of Article 53 (2) of the Company Law, the shareholder who withdraws the capital contribution shall bear the responsibility for returning the withdrawn capital contribution to the company and the compensation responsibility for the company, and the responsible "directors, supervisors, and senior executives" shall bear joint and several liability with the shareholder. The judge also reminds new professionals in the workplace not to disregard legal risks for the sake of fulfilling their duties, and to always remember the principles of "acting within one's means" and "unifying rights and responsibilities". If promoted to the position of "Director, Senior Supervisor" based on their strength, they should also strictly fulfill their regulatory obligations and effectively avoid their own legal risks while maintaining the safety of the company's capital. (New Society)

Edit:XieYing Responsible editor:ZhangYang

Source:chinanews.com.cn

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