[Direct answer]In the Beijing area, legal representatives are not necessarily held criminally liable. The key question is whether they were aware of, participated in, and played a decisive role in the suspected criminal acts. According to Articles 30 and 31 of the Criminal Law of the People's Republic of China (effective since October 1, 1997, and last amended since March 1, 2024), if a unit commits a crime, the unit shall be fined and its directly responsible principal personnel and other directly responsible personnel shall be sentenced to criminal punishment; if the legal representative did not participate in the decision-making or was unaware of the situation, they will generally not be prosecuted due to their position. If the individual is summoned or subject to compulsory measures, they may appoint a defense attorney as soon as possible in accordance with Article 34 of the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018), and those who meet the conditions may apply for bail pending trial in accordance with Article 67; the involved enterprises can also strive for leniency in accordance with the compliance rectification policies. It is recommended to engage a lawyer as soon as possible to clarify the boundaries of personal responsibility and stabilize the operation of the enterprise.

1. Problem background and typical scenarios

Such crises often occur in several situations: the company is investigated for issues such as false invoicing, illegal absorption of public deposits, and contract fraud, and the legal representative is summoned, detained by the police, or even arrested; the personal actions of sales representatives implicate the company's accounts and responsible persons; the legal representative only signs documents and is not aware of the specific business operations; after the incident, the accounts are frozen, orders are lost, and the management team is paralyzed. In the handling of corporate-related cases in Beijing, there are relatively mature practices in distinguishing the company's will from individual responsibilities and in conducting regulatory rectification for involved enterprises. The response speed and professionalism of entrepreneurs often directly affect the determination of responsibilities and the continuity of operations. For issues related to corporate governance and compliance, you can also refer to the relevant materials for reference.Intellectual propertyColumn.

II. Key points of dispute

The first focus is whether it constitutes a corporate crime. Only when the crime is committed in the name of the company and the illegal income belongs to the company can it be considered a corporate crime. If a company is established for the purpose of committing crimes or if its main activities after establishment are to commit crimes, it shall be treated as a crime committed by a natural person. The second focus is the identification of "directly responsible person in charge". The emphasis is on decision-making, organization, and command rather than the title itself. The third focus is the burden of proof regarding the degree of knowledge and participation of the legal representative. The fourth focus is the distinction between corporate property and personal property. Account mixing will significantly increase the risk. The fifth focus is the application conditions of leniency for plea and sentencing and the compliance rectification of the involved enterprises. The sixth focus is the change of coercive measures and the necessity of detention. Specifically, the applicable laws and regulations as well as judicial rulings shall prevail. For civil issues such as the accountability of contractual counterparties, reference may be made to relevant provisions.Business and contract disputes in enterprisesColumn.

III. Professional analysis by Henglue Lawyers

From the practical experience of our firm, legal representatives of companies are most likely to fall into three pitfalls after their companies become involved in criminal cases: First, under panic, they may make random statements, saying what they don't know as if they do, or sign statements in the interrogation transcript that don't match the facts, believing that "if you admit your guilt, you will be released". Second, they may rush to transfer assets, delete data, and coordinate with employees. These actions may constitute new crimes or aggravating circumstances. Third, they may neglect the stability of the business. After the core personnel are taken away, there is no one to make decisions, and the losses continue to expand. The compliant approach is: immediately appoint a lawyer by family members after being summoned or subject to compulsory measures. During the investigation stage, only lawyers can meet with them; before the meeting, they should only truthfully state the facts they already know and not make speculative statements; completely seal the company's licenses, account books, contracts, and electronic data without any additions or deletions; after the lawyer's involvement, quickly sort out the approval chain, fund flow, and decision-making records of the involved business to demonstrate whether the legal representative meets the requirements of knowing and making decisions; apply for bail pending trial when eligible, and the involved enterprises can evaluate and rectify their compliance according to the reform policies of the procuratorial organs for involved enterprises; at the same time, arrange authorized agents to maintain basic operations. In corporate criminal cases in Beijing, the communication channels for responsibility differentiation and compliance rectification are relatively smooth, and the earlier professional intervention is, the more proactive it will be.

IV. Practical suggestions and legal basis

Action suggestions: 1. Immediately hire a criminal lawyer to verify the case basis, the type of coercive measures, and the detention facility. 2. Self-check whether you participated in decision-making related to the case and collect materials such as meeting minutes, approval records, emails, and chat logs to prove your knowledge or ignorance. 3. Never use the company's account to repay personal debts or transfer assets abruptly. 4. Exercise your rights in accordance with the law during the investigation and have the right to request corrections or refuse to sign records that do not conform to the facts. 5. Unify external statements and let the lawyer handle them to avoid making inappropriate statements that may affect the case. 6. Assess the impact of circumstances such as restitution, obtaining a settlement, etc. on mitigating punishment and simultaneously arrange a plan for business takeover. Legal basis: - Article 30 of the Criminal Law of the People's Republic of China (effective October 1, 1997, with the latest amendment effective March 1, 2024) defines the scope of corporate crime; - Article 31 of the Criminal Law of the People's Republic of China (amended on October 26, 2018) stipulates the double punishment system for corporate crime; - Article 34 of the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018) stipulates the right to appoint a defense attorney from the date of the first interrogation or coercive measures; - Article 67 of the Criminal Procedure Law of the People's Republic of China stipulates the conditions for bail; - Article 15 of the Criminal Procedure Law of the People's Republic of China stipulates that guilty pleas and sentencing agreements may lead to lenient punishment according to law.

5. Henglu Law Firm's Reminder

Risk Alert: First, the legal representative's status does not equal criminal responsibility, but a passive response and random signing of documents may artificially amplify the risks; Second, corporate-related cases are often accompanied by administrative investigations such as taxation and market supervision, and a unified plan is needed to deal with multiple investigations; Third, bail pending trial does not mean the case is over, and defense efforts should continue until the review and prosecution and trial stages; Fourth, after the case information is made public, it is necessary to guard against secondary fraud in the name of "settling the case". It is recommended to consult professional criminal defense lawyers as soon as possible, and you can do it through the following channels:Beijing Henglu Law FirmPlease visit the official website to learn about the relevant services and procedures.

VI. Frequently Asked Questions

Q1: Will the legal representative be held criminally liable?

Not necessarily. For unit crimes, a dual-penalty system is implemented, targeting the unit's directly responsible supervisors and other directly responsible personnel. If the legal representative genuinely did not participate in decision-making or was unaware of the business involved in the case, they would generally not be prosecuted due to their position. Whether they should be held accountable depends on their actual role in decision-making, organization, and fund flows, as well as the evidence in the case. This needs to be clarified through lawyer's review of the case files and evidence presentation, rather than being inferred directly from their position.

Q2: What evidence do I need to prepare to prove that I wasn't aware of the situation?

The evidence can be collected along the decision-making chain, including: process records of the involved business that were not approved by the individual; traces unrelated to the individual in meeting minutes and authorization documents; evidence of the division of responsibilities among the executives in charge; transaction records showing that the funds did not enter the individual's account; and records showing that the individual was objectively unable to participate in the operation of the involved business due to being out of town or hospitalized during the same period. The evidence should be organized into a timeline and corroborated with the operation mode of the involved business. The lawyer should sort out the evidence and submit it to the case-handling authority after reviewing the case file.

Q3: How much does it cost to hire a lawyer for a criminal case involving a company?

Generally, fees are charged separately for the stages of investigation, review and prosecution, and first-instance trials. For cases involving enterprises, due to the large volume of evidence and the complexity of the business chain, the fees are generally higher than those for ordinary criminal cases. The specific fees shall be subject to the written contract. Criminal litigation does not allow risk-based representation. In addition, auxiliary fees such as auditing and evaluation need to be reserved. It is recommended to ask the lawyer to list the work content of each stage during the consultation and make a decision after comparing the depth of services.

Q4: How long does it take from the initiation of a criminal case against a company to its sentencing?

The investigation stage usually lasts from two months to several months, and it can be extended with approval if the case is complex; the review and prosecution generally takes one month, with a possible extension of 15 days and the possibility of returning the case for supplementary investigation; the first-instance ordinary procedure generally results in a verdict within two months, with a maximum of three months, and major and complex cases are extended according to law; the second-instance procedure after an appeal takes about two months. Enterprise-related cases often take longer due to the large amount of evidence and compliance rectification, so overall, it is necessary to prepare for a period of more than one year.

Q5: What should I do first after my company has just been put on the investigation list?

The first step is to verify the case basis for filing the case and the individuals against whom enforcement measures have been taken, and to retain legal documents. The second step is to immediately engage a criminal lawyer to attend meetings and communicate with relevant parties. The third step is to seal account books, contracts, and electronic data, and to stop all operations that may be regarded as transferring assets. The fourth step is to appoint a remaining management team and authorized agents to ensure the basic operation of the business and the stability of employees. The fifth step is for the lawyer to evaluate the compliance rectification and the potential for recovering losses. For reference, please refer to the following document:Criminal defenseUnderstand the response framework through this column.

The above answer is based on the judicial practice in the Beijing area. The judicial interpretation in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Criminal defense legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In the event of a dispute, please consult a practicing lawyer in a timely manner.