SILVIA MARIA GONZALEZ

Exchange student University of Deusto

The case

LLC (Festivals Company) need to give the travel agency 500.0000 as a company’s security deposit. A company made some efforts to obtain the permission of holding one travel festival, but in accordance with the agreement, it needs to provide the presiding travel agency 500000 RMB as security deposit for such activity. The chairman and legal representative Mr. Ma directed the company’s financing staff to pay 500000 Yuan as a company's security deposit for the above to mentioned travel festival of the travel agency. Then Mr. Ma asked the travel agency to pay such amount to C Co under the name of returning deposit. Later on, because of the transfer of share, Mr Ma steeped down.

it also asked A co.Mr. and Mr. Ma by reason of damaging the company's right and benefit by director and asked him to bear the burden of compensation. Hu was the director of B Co meanwhile. to take severable compensation liability. and Co. Ma was the chairman and legal representative of A Co. its chairman and legal representative. then he was appointed to be the subsidiary of A Co. . Not until in audit has B co known the whereabouts of its 500. Hu was appointed by A Co.000 RMB. It is investigated that in the early stage of B Company’s establishment. Therefore. B prosecuted Mr. Mr.

A Co and C Co all should be sever ably liable to repay the money? How shall the court make the judgment? .Question 1. Is Mr. Ma.

however. if a director is proven to have dissented at the vote adopting such resolution and such dissension was noted in the minutes.3 Articles 113  “The directors shall be responsible for resolutions adopted by the board of directors. those directors participating in the adoption of the resolution are liable to the company for damages. and causes the company to incur serious loss. Provided. Paragraph . administrative regulations or the articles of association. then the director may be exempt from liability.According with the law of commercial law. Where a resolution of the board violates any national statutes. ” .

 So in this case. . the director of the company took a decision without ask the shareholders. He is the responsible to damage the right’s of the company.

. The chairman Mr. Ma in the company A was the legal responsible and legal representative of the B and C ( as a filial)company but later he choose Mr Hu such as a director of the B company.

Where the vice-chairman is unable to or does not perform his function.  Article 41 (Right of convening shareholders meeting by shareholders) “Where a limited liability company has a board of directors. its shareholders meeting shall be convened by the board of directors and presided over by the chairman of the board. the meeting shall be presided over by a vicechairman. . According with the article 41 that said:  Where the chairman of the board is unable to or does not perform his function. the meeting shall be presided over by a director jointly nominated by more than half of the directors representing more than one-tenth of the voting rights.

 Where a limited liability company does not form a board of directors. the shareholders meeting shall be convened and presided over by the board of supervisors or the supervisor in the absence of a board of supervisors. the meeting shall be convened and presided over by shareholders . Where the board of supervisors or supervisor cannot or does not perform its function. Where the board of directors or executive director cannot or does not perform its function. the shareholders meetings shall be convened and presided over by the executive director.

and put Mr. So he has to be the responsible of his acts. . Hu as a director without talk with anybody and without being a vice-chairman. This paragraph can explain us that the chairman of the company has taken the decisions in a wrong way.

the meeting shall be presided over by a director jointly nominated by more than half of the directors representing more than one-tenth of the voting rights. . Where the chairman of the board is unable to or does not perform his function. the meeting shall be presided over by a vicechairman. Where the vice-chairman is unable to or does not perform his function.

So maybe in that case he choose the correct decision. the shareholders meetings shall be convened and presided over by the executive director . On the other side we do not know if there was a board of directors. .  Where a limited liability company does not form a board of directors. This paragraph can explain us that the chairman of the company has taken the decisions in a wrong way. Hu as a director without talk with anybody and without being a vice-chairman. So he has to be the responsible of his acts. and put Mr.

 The article 38 said about that one of the functions of this law is: (3) To examine and approve reports of the board of directors.  .

The founds…    Article 149 The director and senior officer: (1) May not misappropriate company funds.  (2) May not deposit company assets into an account in his own name or in any other individual's name.  . general meeting of shareholders or the board of directors in violation of the articles of association. (3) may not loan company funds to other people or give company assets as security for the debt of any other individual without the approval of the shareholders meeting.

administrative regulations or the articles of association. . Article 150 “ If a director. he shall be liable for the loss so caused”. supervisor or the senior officer causes detriment to the company while performing his duties in violation of laws.

the shareholders of a limited liability company or a joint stock limited company that individually or jointly hold one percent (1%) of the total shares for consecutive 180 days may request in writing the board of supervisors or the supervisors of a limited liability company without a board of supervisors to file suit before a people’s court. Where a supervisor is involved in the circumstance as described in Article 150. Article 152 Where a director or senior officer is involved in the circumstance as described in Article 150. aforesaid shareholders may request in writing the board of directors or the executive director of a limited liability company without a board of directors to file suit before a people’s court .

or infringes upon the rights and interests of the shareholders. In the second place he should not named the Mr Hu the manager of the B company without ask again and arrange a meeting.  . the shareholders may file suit before a people’s court. He could not took any decision without to consult and ask the shareholders. First of all the director should return the money because he could be accused of fraud. Article 153 Where a director or senior officer violates laws. How the court should solve the case? We can check the legal liability. administrative registrations or the articles of association.

 Article 206 Where the company engages in any business activities unrelated to the liquidation. . it shall be warned by the company registration authority and its income derived therefrom shall be confiscated.

Article 209 Where the company registration authority grants registration to an application which fails to meet the requirements prescribed herein or. . refuses to grant registration to an application which meets the requirements prescribed herein. administrative penalty shall be imposed on the supervisor directly in charge and the other person(s) directly responsible in accordance with the law.

 Article 215 Where a company violates of this Law. and its assets are not sufficient to cover both. its assets shall first be used to cover the civil liability for damages. . and is therefore liable for civil damages as well as for an administrative fine or criminal fine.

it shall be ordered by the company registration authority to make rectification. criminal liability shall be imposed in accordance with the law. . or liquidation. division. reduction of registered capital.000 but not more than RMB 100. Article 205 Where a company fails to notify creditors through notice or public announcement in accordance here with while carrying out merger.Article 216 Where any violation of this Law constitutes a crime.000. and the company shall be fined not less than RMB 10.

Maybe the company should dismiss him because he did some fraud mistakes. The quantity of the money its not enough high to open a penal process. .conclusion  The court should tell the manager to return the money and open an expedient.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.