A statutory representative in a Chinese entity is a person who provides service of process representation who is also empowered to perform the company’s obligations on its behalf, both those required by law and the company’s articles of incorporation. They are typically not a lawyer, rather, they are an agent who personally represents the entity. The registered agent of a Chinese company is its statutory representative. However, they also have additional statutory duties and obligations.

The phrase “statutory representative” in Chinese law is comprised of two halves, that being ‘statutory’ and ‘representative.’ The representative aspect of the position refers to the officer’s right to represent the entity, sign contracts, and make filings on its behalf, like any other duly authorized representative. The statutory aspect of the position refers to how the powers, duties, and personal liability of the role are defined by statute, specifically the statutory powers of a company Manager, and moreover the company’s Articles and Bylaws cannot eliminate the powers and duties of this role below the statutory provisions. Chinese corporate law treatises note that the statutory representative role is poorly defined and has been subject to a great deal of litigation over both abuse of power and personal liability.

Statutory representatives have expansive powers over a company’s decision-making and management processes. Furthermore, the law requires all companies to register their statutory representative with local government, which will then disclose details of the statutory representative, such as their name and the date of their appointment and registration, via the National Business Credit Lookup System.  

The board can also increase the officer’s power beyond the minimum statutory limit, and bona fide third parties are not required to review corporate documents to understand the scope of their approval. Should statutory representatives exceed their authorized powers or violate the law, any ensuing liability will be imposed on the business organization. In turn, the entity is then entitled to take any necessary legal action against its statutory representative. Conversely, a statutory representative may be held personally liable for any acts that harm the company they represent, or legal violations committed in an individual capacity.  

Comparative Law
In the United States and most other jurisdictions, there is statutory representation, however today the requirement is to have a registered agent who is named for the company and receives service of process and other notices. The registered agent is not said to represent the entity nor is there possibility of finding personal liability against them.  Additionally, a registered agent lacks any formal legal control over the company.

While not explicitly mandated by law, Chinese judges have in some cases maintained social harmony by finding personal liability against a statutory representative. In some unfortunate cases, individuals unfamiliar with Chinese law decide to become the statutory representative without understanding the risks.  An attorney will often not know they need to advise the client about this kind of risk, because it is very well known in China and they assume it applies everywhere.

The United States and United Kingdom corporate law statutes required naming “representatives” of a company who were also officers empowered to control the corporation. Now, registered agents fill this role. Some jurisdictions, such as New York, have eliminated the requirement for registered agents. Early American corporate law in many ways had concerns similar to today’s Chinese corporate law, requiring most businesses to operate as partnerships where at least one natural person would have unlimited personal liability as a “general partner.” China’s legislative history makes explicit note of the evolution of Roman and American corporate law towards the Delaware and New York models, and intends to gradually reduce these kinds of restrictions on limited liability.

Further Reading

See our comprehensive resources on China’s Foreign Investment Law. and an overview of FDI regulation in our Foreign Investment Law FAQ.

Translation Guide
法定代表人