Legal analysis
The risks of shell companies are: 1, criminal responsibility, and the legal representative's responsibility mainly comes from unit crime. In criminal legal terminology, companies and enterprises are uniformly expressed as units. When a unit commits a crime, it should bear the responsibility of fine, and often the directly responsible person in charge and other directly responsible personnel should be investigated. Here, the directly responsible person in charge and the directly responsible person often overlap with the legal representative. 2. Civil liability. As mentioned above, under normal circumstances, the civil liability arising from the legal representative's duty behavior is borne by the legal person, and the legal representative generally does not need to bear civil liability directly, but there are exceptions. The legal representative can bear direct responsibility under the following circumstances: (1) bear civil liability for compensation to the unit legal person due to business mistakes; (2) Liability for breach of contract that the legal representative may face; (3) Tort liability; (4) the responsibility of shareholders. Shell companies are also called ready-made companies. It is a limited company established by the promoters according to the laws of Hong Kong or Britain, but it has not appointed the first director and no investors have subscribed for shares, so there will be no business, creditor's rights and debts. When the company is needed, investors only need to hand over the directors and shareholders to the company secretary, who will make relevant documents. It usually takes a few hours to finish.
legal ground
People's Republic of China (PRC) Civil Code
Article 57 A legal person is an organization that has the capacity for civil rights and civil conduct, enjoys civil rights and undertakes civil obligations independently according to law.
Article 61 In accordance with the law or the articles of association of a legal person, the person in charge of civil activities on behalf of the legal person is the legal representative of the legal person. The legal consequences of the legal representative's civil activities in the name of a legal person shall be borne by the legal person. The restriction of the legal representative's representation by the articles of association or the functions and powers of the legal person shall not be against the bona fide counterpart.