The "legal representative" of a Chinese company has wide-ranging powers. Multinationals should carefully select the legal representatives of their PRC subsidiaries and plan in advance for issues that occasionally arise. This advisory is one in a series prepared by Pillsbury's China Practice on questions frequently asked by our clients doing business in China.

Here, we summarize current PRC laws relating to the legal representatives of foreign invested companies, including the responsibilities and potential liabilities of a legal representative and some methods of minimizing risk. This memo also briefly discusses the general procedures for appointing or removing a legal representative. Unless otherwise specified or as otherwise indicated by the context, we will use the word "company" to refer to a foreign invested company in China, rather than its offshore parent company.