Question raising

According to the Company Law, "Senior management personnel refer to the manager, deputy manager, financial manager, secretary of the board of directors of a listed company, and other personnel specified in the company's articles of association.". The Regulations on the Administration of Registration of Market Entities stipulate that market entities shall register with the registration authority for the registration of senior management personnel. It doesn't seem difficult to identify senior executives of a company based on this. However, due to some companies setting up positions with names that are inconsistent with the aforementioned regulations, such as Vice President, Assistant to the President, CEO, CFO, etc., some companies have not filed their executives in accordance with the law, which often leads to disputes in determining the scope of executives, especially in cases where executives need to be held accountable for their loyalty and diligence obligations to the company, the identification of executives is particularly important. So, how does judicial practice grasp the identification of executives?

Lawyer analysis

According to relevant regulations, senior executives of the company should be registered with the market supervision and management department. However, in judicial practice, the identification of executives cannot be solely based on the information of business registration, but rather focuses more on "substantive examination". When determining whether a party is an executive, it is not limited to the formal examination of the company's executive appointment and dismissal procedures, but should adhere to the substantive examination standard. That is, based on whether the party enjoys the rights of a company executive and actually performs executive duties, and combined with specific facts such as the party's external expression of intention and signing of important documents, it is necessary to consider whether they actually control the company's operating rights or the execution decision-making power of major matters, and then make a judgment. Therefore, the company needs to prove that the parties involved are senior executives of the company, which can be proven from the following four aspects:

1、 Whether it belongs to senior executives as stipulated by the Company Law or Articles of Association.

According to the Company Law, "Senior management personnel refer to the manager, deputy manager, financial manager, secretary of the board of directors of a listed company, and other personnel specified in the company's articles of association." Generally, personnel holding the aforementioned positions or other personnel designated as executives in the company's articles of association will be recognized as executives.

2、 Has it been appointed by the board of directors.

According to the Company Law, the board of directors decides on the appointment or dismissal of the company's manager and their remuneration, and decides on the appointment or dismissal of the company's deputy manager, financial manager, and their remuneration based on the manager's nomination. Therefore, the company can provide relevant appointment documents of the board of directors to prove that the parties involved belong to senior executives.

3、 Do you have the authority of an executive.

The senior management of a company should be a specific group of people who execute the decisions of the company's shareholders, have executive power or a certain degree of decision-making power, possess core information of the company's internal management or external business, and determine the company's decision-making and development direction. Therefore, the company can provide materials such as an organizational chart, job responsibilities, scope of authority, job responsibilities, and proof of the importance of responsible work to prove that the parties actually enjoy the authority of executives.

4、 Whether it actually fulfills the responsibilities of senior executives externally.

Due to the mismatch between "executive powers" and "executive positions" in practice, in judicial practice, attention is also paid to whether the parties actually fulfill the duties of executives. Therefore, the company can provide relevant labor contracts (job descriptions), important documents signed with external parties, as well as evidence such as contracts, personal reports, salary standards, etc., to prove that the parties have actually fulfilled their duties as executives.

To avoid disputes over whether it belongs to executives, we suggest that the company clarify the scope of executives in its articles of association based on actual circumstances, and go to the market supervision and management department to complete the filing of executives, in order to fix their executive identity.