Summary
In practice, when a company falls into deadlock, a nominal legal representative often encounters substantial obstacles in removing their registration as the company’s legal representative. To remove such registration through litigation, both substantive and procedural requirements must be satisfied. These two requirements are indispensable and constitute the necessary prerequisites for judicial intervention.

Case Overview

Plaintiff: Chen
Defendant 1: A Garment Company in Foshan (the “Garment Company”)
Defendant 2: A Joint Stock Company in Shanghai (the parent company of Defendant 1, the “Parent Company”)

Plaintiff’s Claims

1. The plaintiff no longer directly or indirectly holds equity in the Garment Company and therefore has no obligation to serve as its legal representative, manager, or director.
2. The plaintiff’s term as manager, director, and legal representative has expired. The defendants should have appointed new personnel and removed the plaintiff from the business registration.
3. The plaintiff never received any remuneration for serving in these positions, nor did he participate in the company’s management. He is objectively unable to perform these duties.
4. The plaintiff is unable to remove the registration on his own, and the defendants’ refusal to cooperate severely infringes his lawful rights.
Request: The plaintiff sought a court order requiring both defendants to assist in removing his registration as legal representative, manager, and director with the business registration authority.

Defendant Garment Company’s Arguments

1. The company and its board, as well as the Parent Company, never received a written resignation or other formal request from the plaintiff.
2. Although the plaintiff’s term expired, the company has not made decisions on replacement. Unresolved matters under an equity acquisition agreement between the plaintiff and the Parent Company would cause irreparable losses if the registration were changed.
3. Appointment and removal of a legal representative are internal corporate governance matters and must be decided per law and the company’s articles.
Therefore: The defendant requested dismissal of the plaintiff’s claims.

First-Instance Judgment (Shunde District Court)

The court dismissed all of the plaintiff’s claims, holding:
1. The plaintiff voluntarily agreed to serve as legal representative and submitted the registration application. He therefore must undertake the associated obligations.
2. The same applies to his positions as director and manager. Since the company only had three directors including the plaintiff, his resignation would cause the board to fall below the statutory minimum. No new directors were elected, so the plaintiff must continue performing his duties.
3. Changing the legal representative requires a shareholder or board decision under the Company Law. There is no evidence the company made such a decision. The plaintiff merely expressed a unilateral wish.
4. Any restrictions on the plaintiff arising from his legal representative status do not constitute unlawful infringement. If his rights were violated, he should seek other legal remedies.

Second-Instance Judgment (Foshan Intermediate People’s Court)

The appellate court reversed the first-instance judgment and ordered both defendants to assist in removing the plaintiff’s registration.
The court found:
The plaintiff was no longer a director or manager.
He no longer had any interest connection with the company.
His request to remove his registration had legal basis.

Enforcement (Shunde District Court)

The court issued a Notice of Assistance in Enforcement to the business registration authority, which removed the plaintiff from the registrations. The current legal representative field now states removal “pursuant to Assistance Execution Notice (2025) Yue 0606 Zhi 20225.” Enforcement is complete and the court has issued a closing notice.

Legal Analysis

I. Substantive Requirements for Judicial Removal of Legal Representative Registration

The substantive requirement is that the legal representative no longer has substantive connection with the company — including termination of labor relationship, expiration or resignation from the director/manager position, or loss of shareholder status.
1. The legal representative has resigned or ceased to serve as director or manager
Under Article 10(1) of the Company Law, the legal representative must be the chairman, executive director, or manager. Thus, the legal representative’s status depends on these underlying roles. Once these roles end, the legal representative status loses its foundation.
In this case, the plaintiff’s terms as manager, director, and legal representative had expired, and he repeatedly requested the defendants to process his removal.
2. The legal representative has completely withdrawn from the company’s operations and holds no substantive connection
Article 61 of the Civil Code states that a legal representative acts on behalf of the legal person, and the legal consequences bind the legal person. Therefore, a legal representative must be substantively connected to the company through shareholding, employment, or management responsibilities.
In this case, the plaintiff no longer held shares, did not participate in management, was not an employee, and could not perform the duties of legal representative. Allowing him to remain in this position would be unfair to all parties, including creditors.

II. Procedural Requirements for Judicial Removal of Legal Representative Registration

The procedural requirement is exhaustion of internal corporate remedies, showing that it is impossible to achieve registration changes internally.
1. The company failed to complete the change within the statutory period without reasonable cause
Under the Company Law and the Regulations on Market Entity Registration, the company must appoint a new legal representative and complete the registration within 30 days after resignation becomes effective.
2. The original legal representative has exhausted internal remedies
Judicial intervention is permitted only when corporate autonomy fails. The plaintiff must demonstrate attempts to initiate internal procedures, such as submitting written proposals to the board or shareholders.
If the plaintiff is unable to convene or participate in such meetings, and the company refuses to act, internal remedies are exhausted.
 
Boundary of judicial intervention
Courts only intervene when:
The company fails to perform its statutory obligations, and Internal governance mechanisms cannot resolve the issue.
In this case, the plaintiff repeatedly requested assistance from the company and parent company. They refused to cooperate. The plaintiff was no longer a shareholder, his term had expired, the company had ceased operations, and he could not convene meetings to pass resolutions. Thus, he had exhausted all internal remedies.

Conclusion

This case illustrates that both substantive and procedural requirements must be met before a court will intervene to remove a legal representative’s registration. Where a legal representative has fully severed substantive ties with the company and has exhausted internal remedies but the company refuses to act, judicial relief becomes available to ensure fairness and safeguard lawful rights.