On October 27, lawyer Zhan Feiyang, founding partner of Beijing Fuding Law Firm, took his new work "Company Compliance-The Founder's Law on Avoiding Failure" as a guest on the "Dialogue with Legal Person" micro-interview initiated by Toutiao Finance Channel, and shared his wonderful views on hot issues in the field of company compliance. Peking University Dharma Treasure School is a special support organization for this micro-interview.
Lawyer Zhan Feiyang is a member of the Professional Committee of the Venture Capital and Private Equity of Beijing Lawyers Association. He has provided legal services to many leading private equity investment institutions in China. He has also served as legal advisor to many high-growth companies and their founders. He can provide solutions to enterprises in equity financing, structural restructuring, acquisitions and mergers, equity incentives, compliance operations, crisis management, etc.
Strengthen compliance management . Preventing compliance risks is a new trend in the development of global enterprises. In recent years, my country has also been vigorously strengthening corporate compliance construction, especially in 2018, the country issued national compliance standards. Compliance management is no longer limited to state-owned enterprises, central enterprises and large private enterprises, but also includes a large number of small and medium-sized enterprises. The construction of a complete compliance system requires a lot of cost investment, which is often difficult for small and medium-sized enterprises to bear. How to help corporate founders quickly solve the confusion of company compliance operations and improve corporate compliance management at the lowest cost has become a research topic for lawyer Zhan Feiyang, which has also become his original intention of writing the book "Company Compliance".
This micro-interview involves issues in multiple fields such as corporate compliance management, financial management, equity financing, anti-monopoly, human resources management, entrepreneur property protection and criminal compliance risks. We will share it with readers in two sections. The following is the transcript of the first interview.
How to isolate risk from entrepreneurs’ personal wealth and corporate assets?
Once a company is established, it has an independent life, and the founder cannot equate the company's assets with his own personal assets. However, many startups are mixed with the founder's personal assets and family assets, which is difficult to distinguish: when the company needs money, the individual and the family will unconditionally transfusion blood to the company; when they and the family need to consume, especially when buying bulk items, such as luxury houses and luxury cars, they will draw funds from the company. In this case where the assets of the family and business are are mixed with , once the company has debt risks, the creditor may recover debts from the company, the founder's personal or even the family's property, thus causing the individual to bear a greater debt risk. In addition, confusion of assets of household and business and confusion of financial accounts may also bring about the risk of tax penalties; failure to pass the resolution of the company's shareholders' meeting and arbitrary disposal of embezzlement of company property also constitutes the risk of embezzlement of office.
Therefore, the founder must take good measures to isolate personal assets and corporate assets, prevent legal risks caused by the confusion of family and business assets in advance, and build a firewall for family wealth. The company must strictly operate the company in accordance with the standardized financial system, especially keeping evidence such as accounting vouchers, books, agreements, etc. to prove the independence of the company's property and personal property, and to regulate the company's collection and expenditure of funds. When a company disposes assets and funds, it must form the company's will through the resolution of the shareholders' meeting or the board of directors in accordance with the law. No shareholder can turn the company's property into his own personal property based solely on his personal will.
How can enterprises prevent core employees from leaving their jobs and taking away business secrets?
In recent years, there have been endless leaks of employees who have left their employees. Some employees cannot resist the temptation of huge interests, do not comply with the agreements in the restricted competition agreement, and leak confidential data to companies that have competitive relationships with the original employer after leaving. Many companies have suffered huge economic losses as a result, and how to avoid the risk of leaking secrets from employees has also become a headache for many companies. In the process of legal practice, there are still some countermeasures:
First, clarify the confidentiality obligation in the enterprise rules and regulations. In terms of specific practices, rules and regulations can make the core information or information mastered by core employees of the enterprise become "business secrets". After defining the scope of protection of commercial secrets, the commercial secrets can be classified confidentially to facilitate the implementation of hierarchical protection.At the same time, according to the responsibilities and requirements of employees in different positions, the specific confidentiality obligations of employees during the entire appointment process are clarified in the company's rules and regulations.
Secondly, core employees sign the confidentiality agreement and strengthen confidentiality training . The company can directly sign a confidentiality agreement with its employees, or it can also be agreed in the form of confidentiality clauses in the labor contract. In confidentiality training, enterprises can systematically convey confidentiality laws and regulations to employees so that they can know the legal consequences of leaks in advance.
Again, make a good job of resignation and hand over confidential information when employees leave to avoid leaks.
Finally, when it conforms to the company's development philosophy, leave employees will provide entrepreneurial support. The "core employees" are independently responsible for the company's branches and reinvestment companies, which can not only enable them to realize their entrepreneurial ideals, but also limit the business secrets they have to within a controllable range.
How to avoid touching the legal red line for financing for small and medium-sized enterprises?
Illegal fundraising is not a crime in my country's Criminal Law, but a general term for a type of behavior. Generally speaking, illegal fundraising requires four conditions at the same time: absorb funds without the approval of relevant departments in accordance with the law or borrowing legal business; publish and publicize to the public through media, promotion meetings, etc.; promise to repay principal and interest within a certain period of time; absorb funds from unspecified social objects, - individuals absorb deposits from more than 30 people, and units absorb deposits from more than 150 people.
When enterprises are financing privately, they should pay attention to reducing risks by financing specific objects, and only raise funds from the "specially rich and wealthy" (specific objects, a few people, rich people, relatives, friends and colleagues), rather than publicly publicize them to the public through media, promotion meetings, flyers, mobile text messages, WeChat Moments, etc. Second, financing funds should be used for production and operation. Even if operating losses or capital turnover is difficult, the inability to repay principal and interest in time will cause disputes and generally will not cause criminal liability. The third is to avoid attracting deposits at high interest rates and grasp your ability to repay. Fourth, when financing, a written loan contract should be signed, and the purpose and repayment period should be agreed upon. Once the loan cannot be repaid, you should actively seek legal means to resolve the problem of inability to perform the contract.
How to avoid the impact of the founder's criminal violation on the business of a company?
Founders should first cultivate their own legal awareness and legal business thinking, fully understand the criminal legal knowledge closely related to the business operation, understand the boundaries between crime and non-crime, and then draw a "red line" for each type of business behavior, and predict possible criminal risks in advance. But this is far from enough. Buffett said: "It doesn't matter if you can accurately predict rain. What's important is whether your Noah's Ark has been built." Therefore, entrepreneurs should also establish a set of risk management mechanisms and risk emergency plans:
1. Reduce the criminal compliance risks caused by arbitrary decisions, establish a democratic system within the enterprise, make major decisions of the enterprise, and invest major funds, etc., and should conduct extensive research and solicit opinions from shareholders and executives.
2. Improve the company's internal administrative, accounting, personnel and other management systems, strengthen supervision and management through a rigorous internal control system, and prevent criminal compliance loopholes.
3. Pay attention to compliance training within the enterprise. Not only should entrepreneurs themselves strengthen their legal knowledge learning, but they should also pay attention to the training of employee criminal compliance legal knowledge, clarify the bottom line of employee behavior, build a compliance culture, keep an alarm bell ringing, and build a solid line of compliance risk defense.
