[Direct answer]In the Beijing area, after company executives are subject to criminal coercive measures, enterprises can operate stably in accordance with the law: According to Article 10 of the new Company Law, if the legal representative resigns, the company shall appoint a new legal representative within 30 days from the date of resignation to ensure the continuity of representation; simultaneously initiate compliance rectification related to the case, distinguishing between individual and corporate responsibilities (Articles 30 and 31 of the Criminal Law). Key time limit: The new legal representative shall be appointed within 30 days. Actions: Conduct industrial and commercial registration changes as soon as possible, sort out authorizations, hire lawyers for compliance, and formulate contingency plans by referring to legal services for corporate commercial and contract disputes.

1. Problem background and typical scenarios

When the actual controller, legal representative, or core executive of a company is placed under control, detained, or arrested, it is highly likely to lead to the suspension of the company's operations. Typical scenarios include: the legal representative being investigated by the supervision authority, with no one authorized to sign official documents or manage accounts; the general manager being involved in a case, resulting in no one making decisions on major contracts; executives being taken away, leading to suppliers demanding repayment and banks withdrawing loans; and family-owned enterprises relying on a single individual for decision-making without succession planning. If the company fails to take timely measures to address these issues, it may miss out on business opportunities, trigger default penalties, or face a credit crisis. For contracts involving performance obligations, relevant measures can be implemented in conjunction with these scenarios.Creditor-debtor relations and enforcement case servicesCoordination; enterprises can also refer to corporate governance to make up for any shortcomings in this regardLegal services for corporate commercial and contract disputes.

II. Key points of contention

The dispute focuses on three points. Firstly, the succession of representation rights: when the legal representative is absent, who can sign contracts with external parties and take over the company's official seal and accounts to ensure the continuity of operations? Secondly, the division of responsibilities: whether the actions of the dismissed executives constitute personal crimes or corporate crimes directly affect the company's assets and reputation. Thirdly, the boundaries of compliance: how can enterprises cooperate with investigations while avoiding destroying evidence or obstructing investigations? For issues involving equity and governance, they can be addressed subsequently.Special services and other case services.

III. Practical Experience of Henglue Law Firm

Based on practical observations in handling corporate legal affairs, the golden response period after executives are taken away is within the first 30 days. Lawyers usually recommend the following: First, immediately sort out the governance structure and, in accordance with Article 10 of the new Company Law, appoint a new legal representative within 30 days and handle industrial and commercial changes; Second, prepare an authorization list and clarify the temporary custodians of the company's official seal, accounts, and contract approval; Third, conduct a self-audit of compliance related to the case, distinguishing between individual and corporate actions and securing fixed favorable evidence; Fourth, unify external statements and stabilize the expectations of clients, banks, and employees. In practice, the most common pitfalls are delaying changes that result in contracts being unable to be signed, and making commitments externally without review. Enterprises should prioritize "compliance rectification" rather than "cover-ups", and when necessary, introduce third-party supervision and evaluation mechanisms, and may refer to relevant standards for reference.Special services and other case-related servicesDevelop a plan.

IV. Practical suggestions and legal basis

The legal basis includes: Article 10 of the Company Law of the People's Republic of China (amended on December 29, 2023 and implemented on July 1, 2024), which stipulates that if the legal representative resigns, the company shall appoint a new legal representative within 30 days; Articles 30 and 31 of the Criminal Law of the People's Republic of China (implemented on October 1, 1997), which stipulate the identification and punishment of corporate crimes (the unit is fined, and the directly responsible person in charge and other directly responsible persons are sentenced to criminal punishment). Practical suggestions: Prepare a succession mechanism for the legal representative in the articles of association in advance; immediately initiate changes and authorizations when executives are at risk; simultaneously carry out compliance rectification and cooperate with investigations, distinguishing between individual and unit responsibilities to minimize the impact on operations. For governance documents and changes in the legal representative, follow-up actions can be taken.Legal services for corporate commercial and contract disputes.

5. Henglu Law Firm's Advice

The removal of executives does not mean that the enterprise will be shut down. Governance replacement should be completed within the "30-day" window, and compliance rectification should be carried out throughout the entire process. Enterprises should prepare contingency plans for the absence of legal representatives, authorization to take over, and cooperation with investigations, practice them regularly, and stay calm in emergencies. Never "put out the fire" by hindering the investigation. Only by complying with the law can enterprises safeguard their basic business operations.

VI. Frequently Asked Questions

Q1: If a company's executives are taken away, will the company be implicated? Can the company continue to operate normally?

Companies may not necessarily be implicated. If the suspected conduct is purely an individual crime, the unit is usually not held liable; if it constitutes a corporate crime, the company may be fined and have its credit affected. Companies can and should continue to operate: promptly appoint a new legal representative, authorize the management team, and maintain contracts and employment relationships. The key is to quickly complete governance replacements and information isolation, cooperate with investigations in accordance with the law, and avoid "institutional paralysis when key personnel leave". Whether a company is implicated depends on whether the conduct reflects the will of the unit and whether the benefits accrue to the unit. This requires lawyers to make judgments based on the facts.

Q2: If a senior executive is taken away by the authorities, what materials should the company prepare to ensure the stability of its operations?

Preparation suggestions: ① Governance documents, such as articles of association and shareholder resolutions, for quickly appointing a new legal representative; ② Authorization and seal ledgers, clarifying the transfer path for official seals, financial stamps, and USB keys; ③ List of major contracts and expiration dates to prevent breaches of contract; ④ Evidence of executives' appointments and responsibilities, to help distinguish between personal and corporate actions; ⑤ A list of materials for cooperation with investigations and communication guidelines. The more complete the materials are, the more stable the transition and compliance will be. It is recommended to seek legal assistance in formulating takeover and compliance plans to avoid procedural flaws.

Q3: How much does it cost for a company to conduct compliance rectification and hire lawyers to deal with legal issues?

The fees depend on the size of the enterprise, the complexity of its operations, and the risks involved in the case. They are usually negotiated on a project basis or by the hour, and include modules such as governance replacement, compliance self-audits, and agency communication. Compared to the costs of business suspension, breach of contract, and damage to credit, the cost-effectiveness of early compliance investment is higher. The specific fees are subject to the lawyer's agency agreement, and it is recommended to first assess the risk level before determining the scope of services.

Q4: How long will it take for the executives to stabilize the company's operations after they are brought in?

The process of replacing the legal representative can be completed relatively quickly: the new legal representative is typically appointed and the business registration changes are completed within a 30-day window, and the authorization to take over can be implemented in a few days. However, the period for compliance rectification and cooperation with investigations depends on the progress of the case, which may take several months. The earlier the changes and authorizations are initiated, the shorter the operational disruption will be. It is recommended to complete the key replacements within the first 30 days to minimize uncertainties.

Q5: If a senior executive is suddenly taken away, what specific actions should the company take?

Four steps: First, verify the situation and cooperate with the investigation in accordance with the law to avoid hindering the investigation; Second, within 30 days, appoint a new legal representative in accordance with the articles of association and Article 10 of the new Company Law, and specify the seal and account handover person; Third, sort out major contracts and due obligations, authorize the team to maintain contract performance, stabilize customers and employees; Fourth, hire a lawyer to conduct a compliance self-inspection, distinguish personal and corporate responsibilities, and formulate a unified external position. Keep records throughout the process and proceed in accordance with the law to protect the enterprise's operations to the greatest extent possible.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

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

Disclaimer: This article is compiled based on the current effective laws and regulations and public 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 case of disputes, please consult a practicing lawyer in time.