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For example, if a company fails to pay all of its the relevant corporate taxes and/or fails to act in good faith then the local authorities may chose to take legal action, civil and/or criminal against both the company as well as the legal representative directly.
Who Can be Appointed as the Company Legal Representative?
Some Potential Problems?
The appointment of the legal representative is a very important decision for both the company and the individual, with serious implications if the wrong person is appointed as they are accorded the legal right by the shareholders to manage and to make decisions on behalf the company.
When a legal representative is appointed or elected, the powers are typically given by a formally notarized document (nominally within the company bylaws).
Why Is A Legal Representative So Important?
A fundamental part of the incorporation process, and a reason for the importance of consulting legal experts in order to define the power and control handed to the legal representative.
It is crucial to ensure that the powers granted to the legal representative are adequate to allow them to complete there required professional functions, and on the other hand, are adequately restricted to ensure the risk is minimised.
For example, a legal representative might need to obtain the owners signature prior to the sale of any company assets or they might need written authorisation to complete bank transfers in excess of USD$5,000 per day.
The Biz Latin Hub group have extensive experience with the company incorporation process; if you have any questions or concerns about the incorporation process and/or the role of the legal representative please contact Craig here.