Risk: if the legal representative violates laws and regulations and fails to implement the articles of association, he will compensate the company for losses, and the interests of shareholders will also be damaged by the risk of legal proceedings. The criminal responsibility of the legal representative mainly comes from "unit crime", which is borne by the person in charge who is directly responsible for the illegal crime of the enterprise. Common unit crimes include the crime of producing and selling fake and inferior commodities, the crime of smuggling, the crime of commercial bribery, the crime of illegally absorbing public deposits, the crime of fund-raising fraud, the crime of infringing intellectual property rights, and the crime of illegal business operations.
Legal basis: Article 152 of the Company Law of People's Republic of China (PRC). Where a director or senior manager violates laws, administrative regulations or the articles of association and damages the interests of shareholders, the shareholders may bring a lawsuit to the people's court.