The legal representative of a business under the 2020 Enterprise Law is defined as “an individual representing the enterprise in exercising rights and obligations arising from the enterprise’s transactions, representing the enterprise as the plaintiff, defendant, party with rights, obligations related to arbitration, courts, and other rights and obligations as stipulated by law.”
Changing the legal representative of a company involves the business completing procedures at the competent state agency within 10 days from the date of the change. When such a change occurs, does it affect the validity of the commercial contracts previously signed by the legal representative?
In terms of contract signing activities, the legal representative registers as a representative of the business, not as an individual. Therefore, whether or not there is a change in the legal representative has no impact on the validity of contracts signed before the change.
Additionally, Article 422 of the 2015 Civil Code regulates contract termination in various cases:
- Contract completion;
- Agreement of the parties;
- Death of an individual who entered into the contract, dissolution of a legal entity that entered into the contract, and the contract must be performed by that individual or legal entity;
- Contract annulment, unilateral termination;
- Impossibility of contract performance due to the subject matter no longer existing;
- Termination according to Article 420 of this Code;
- Other cases as prescribed by law.
- Accordingly, changing the legal representative does not terminate the validity of contracts signed before, except when the parties have agreed otherwise. The company only needs to supplement an appendix to the contract recording the change in the legal representative.
For further consultation on business matters, interested parties can contact MLT Lawyers at 0286.2727.987 or 0919.211.048, or via email: [email protected].