Chapter 1: Legal Risks in Enterprise Internal Governance

Section 1: Enterprise Establishment

Section 2: Enterprise Governance

Section 3: Enterprise Liquidation

Chapter 2: Legal Risks in Enterprise External Operations

Section 1: Contract Signing

Section 2: Contract Performance

Section 3: Dispute Resolution

Chapter 3: Legal Risks in Enterprise Financing and Lending

Section 1: Financial Loans

Section 2: Private Lending

Section 1: Enterprise Establishment

1. Common forms of private enterprises mainly include limited liability companies, joint stock limited companies, and sole proprietorship limited companies. Different forms of companies vary in operation mode, liability method, and scope of liability. In practice, there are cases where investors are not clear about the legal responsibilities corresponding to the company form and blindly establish the company. It is recommended to have a basic understanding of the relevant content of the Company Law before applying for establishment and choose a company form that suits their investment purpose, business expectations, and management capabilities.

2. The capital contribution agreement between the investors (shareholders) when establishing the company is the basic basis for exercising various rights in the future. In practice, there are many disputes caused by unclear agreements or verbal agreements on capital contribution. It is recommended to enter into a capital contribution agreement in written form to clearly agree on the rights and obligations of the relevant parties.

3. Fulfilling the capital contribution obligation in accordance with the capital contribution agreement is the basic responsibility of the investor. In practice, there are many disputes caused by creditors requiring shareholders to bear compensation liability due to untrue capital contributions or withdrawal of capital contributions. It is recommended that investors who adopt the paid-in capital system must ensure that the capital contribution is true and fully in place, and must not withdraw capital contributions in disguised forms. At the same time, it is recommended to properly retain financial evidence of the capital contribution in place to avoid the situation where only the capital verification report is in the industrial and commercial archives and vaguely describes the capital contribution as being in place, causing reasonable suspicion by creditors.

4. Although adopting the subscribed capital contribution method can reduce the capital pressure on investors, the nature of subscribed but unpaid capital contribution is a debt owed by the shareholders to the company. In the event that the company's external debts are due and cannot be repaid, the creditors can claim rights against the shareholders who have not fully contributed, requiring compensation within the scope of the unpaid capital contribution. Shareholders shall not resist on the grounds that the subscribed capital contribution has not reached the deadline. It is recommended to pay attention to the company's operating conditions by participating in management or exercising shareholder rights, and replenish the subscribed capital contribution in advance when necessary.

5. The law allows capital contributions in non-monetary forms such as physical objects, patent technology, and equity of other companies, but in practice, there are many disputes caused by illegal valuation, large deviations in value, and failure to transfer property rights. It is recommended to reasonably determine the value of physical objects, entrust evaluation when necessary, and promptly complete property rights transfer procedures.

6. Due to various reasons, it is common for shareholders to entrust others to hold shares on their behalf, and others register as shareholders, while they actually operate behind the scenes. In practice, there are disputes caused by nominal shareholders denying the shareholding relationship. It is recommended to avoid hidden investment situations as much as possible. If it is necessary to adopt the method of having others hold shares on their behalf, it is recommended to determine the shareholding relationship in writing and retain relevant evidence of fulfilling the capital contribution obligation.

Section 2: Enterprise Governance

7. After the company is established, shareholders may hold certain positions in the company to directly manage or participate in management. In practice, when the company carries out business activities, it uses the name of the shareholder or the shareholder's bank account for convenience and other reasons, resulting in many disputes in which creditors require the shareholder to bear the company's debts. It is recommended to clarify the subject of the contract and avoid receiving goods, collecting payments, or performing contracts signed by the company in the name of the shareholder. At the same time, it is recommended to strictly abide by the financial system and avoid arbitrary transfers between the company's account and the shareholder's account.

8. For business convenience and cost reduction, some companies, especially those with strong industrial chain connections, may establish related companies at the same time. In practice, there are many disputes in which creditors require all related companies to jointly bear responsibility on the grounds that the personalities of the related companies are mixed. It is recommended that related companies avoid personnel mixing, financial mixing, and business mixing in the operation process, especially to avoid property that cannot be distinguished due to financial mixing.

9. The legal representative is the main person in charge who legally represents the company in exercising civil rights and performing civil obligations. In practice, some private entrepreneurs let their cronies or employees act as the legal representative in name, and they operate and control the company behind the scenes. This may lead to loss of control and damage to the interests of the actual controller. It will also have serious consequences for the nominal legal representative when the company is in debt. It is recommended not to let others act as the legal representative of their own company, and entrepreneurs should not easily act as the legal representative for others.

10. The capital contribution agreement is mainly used to establish the company and mainly agrees on the rights and obligations between the investors. After the company is registered and established, the company's articles of association become the "constitution" of the company's operation, stipulating the rights and powers of different roles in the company and the procedures and operating procedures for exercising rights. The roles and functions of the two are quite different. In practice, there are situations where investors attach importance to the agreement and neglect the articles of association. It is recommended to make clear agreements on shareholder rights, company operation, and senior management authority in the company's articles of association to avoid the situation of regulating the company's operation with the capital contribution agreement.

11. The shareholders' meeting is the company's authority and decides on major matters of the company. The Company Law stipulates the convening procedures of the shareholders' meeting, and the articles of association may further refine the process. In practice, there are many disputes caused by the way the shareholders' meeting is convened. The main dispute lies in whether the convening procedure is legal and whether the notice has reached other shareholders. It is recommended that the convener pay attention to the way to notify other shareholders when convening the shareholders' meeting. It must not only comply with the provisions of laws and the company's articles of association, but also pay attention to fixing the evidence of notification for litigation purposes.

12. The amount of capital contribution and the proportion of shareholding determine the size of the shareholder's voting rights and income rights, but the law protects the legitimate rights of both large and small shareholders equally. In practice, there are many disputes caused by large shareholders ignoring the rights of small shareholders and harming the interests of small shareholders. It is recommended that large shareholders strictly abide by the provisions of laws or the company's articles of association, respect the small shareholders' right to know, voting rights, profit distribution rights and other legitimate rights, achieve win-win results, and avoid disputes.

13. Equity transfer is a common situation in the operation of the company. The transfer of equity of a limited liability company shall notify other shareholders. In practice, there are many disputes caused by the failure of shareholders to notify other shareholders when transferring equity to the outside world. After learning about it, other shareholders request to exercise the right of first refusal under the same conditions. It is recommended to obtain the consent of other shareholders before transferring equity to the outside world, or notify them to express their views within 30 days to avoid the transfer purpose from being unable to be realized. In addition, even if the change registration is completed, other shareholders can still claim rights within one year. Don't have the idea of "what's done is done" about this kind of thing.

14. There is no preemptive right of other shareholders in the transfer of shares of a joint-stock limited company. There are fewer disputes over share transfers that occur in listed transactions or in specific trading venues. In practice, the main dispute is the standard for obtaining rights after the agreement transfers shares. It is recommended to pay the price in a timely manner after signing the share transfer contract, and complete the share certificate in the target company and register it in the register of shareholders as soon as possible. If the local registration department can register the share transfer, it should apply for change registration as soon as possible.

15. It is also common to acquire all the equity of a company because of optimism about the company's prospects or to obtain major projects of the company. In practice, the key points that are prone to disputes during the acquisition process are the authenticity of assets, the completeness of liability disclosure, and the clarity of payment conditions. It is recommended to conduct a complete assessment of the company's assets and liabilities before signing the contract. The acquirer should have a detailed understanding of the company's financial situation, and then sign the contract when both parties are aware of it, and make clear agreements on key issues such as company handover, debt undertaking, and payment conditions.

16. The company may provide guarantees to other entities in the course of its business. In practice, there are many disputes caused by the company providing external guarantees. Since this situation will cause greater debt risks to the company, it is recommended to stipulate the guarantee limit in the company's articles of association according to the company's business scale and solvency, and to pass a resolution by the shareholders' meeting when providing external guarantees. At the same time, it is recommended that the guaranteed party provide a counter-guarantee to protect the company's right of recourse.

17. A wholly-owned limited liability company has the characteristics of efficient, convenient, and flexible operation, and there are no disputes of interest between shareholders. However, in practice, it is common for shareholders to be sued and required to jointly bear the debts of the company. If the shareholders cannot prove the independence of the company's property, they will be judged to bear joint and several liability for the company's debts. It is recommended to maintain the independence of the company's finances and the standardization of management, avoid performing company contracts in personal names, and avoid commingling personal finances with company finances.

Section 3: Enterprise Liquidation

18. The expiration of the business period stipulated in the company's articles of association is one of the statutory reasons for dissolution stipulated by the Company Law. If you do not want to dissolve the company, it is recommended to convene a shareholders' meeting to vote on extending the company's business period, amend the company's articles of association, and apply for registration with the industrial and commercial department in a timely manner.

19. If shareholders have conflicts during the operation period and the operation is in a deadlock, shareholders holding more than 10% of the shares can file a lawsuit requesting the dissolution of the company, but the dissolution conditions stipulated by law are relatively strict, and the court will not easily rule to dissolve the company in practice. It is recommended that after a deadlock, first choose rational negotiation, transfer of equity and other pre-procedures, and then resort to law if it is really impossible to solve.

20. After the dissolution of the company, the shareholders are liable for liquidation. Liquidation is to protect the interests of creditors on the one hand, and on the other hand, shareholders can also share the corresponding share if there is a surplus of assets after the company pays off its debts. In practice, disputes caused by shareholders' failure to perform or refusal to perform liquidation responsibilities are increasing. It is recommended that shareholders organize liquidation within 15 days from the date when the company has a reason for dissolution, properly keep financial books, company property and important documents, notify known creditors and issue announcements, and apply to the court for bankruptcy if it is found that the assets are insufficient to pay off debts after liquidation.

Shareholders' liability to the company is limited to their capital contribution, and the worst case is that the investment goes to zero. Therefore, do not deliberately evade or ignore the liquidation liability, otherwise, even if the capital contribution is in place, the shareholders may be jointly and severally liable for the company's debts.

21. Even if small shareholders do not participate in the operation, do not manage the books and property, they are also liable for liquidation after the liquidation event occurs. In practice, there are many disputes caused by creditors suing all shareholders due to the company's failure to liquidate in a timely manner. It is recommended that small shareholders also fulfill their obligations and clarify their responsibilities after the company has a liquidation event, including promptly making liquidation requests to major shareholders and promptly applying to the court for compulsory liquidation when the controlling shareholders refuse to organize liquidation.

Section 1: Contract Signing

22. Be cautious in choosing trading partners. You can trust long-term partners. If it is the first time to conduct business and the amount involved is large, it is recommended to understand the other party's creditworthiness and ability to perform the contract, including checking the registration information at the industrial and commercial department, visiting the other party's company to learn about the situation, and checking the litigation situation on the "China Judgment Document Network".

Putting more effort into contract signing can avoid a lot of trouble in the future. In practice, there are many disputes caused by trusting or giving face and neglecting contract signing. It is recommended not to adopt oral contract forms, especially for more important businesses. Except for businesses with small targets or immediate performance, all written contracts should be signed.

It is best to sign the contract yourself. If you really need to entrust someone else to sign the contract on your behalf for some reason, it is recommended to be sure to indicate the scope of authorization in the power of attorney. Similarly, when signing a contract with the other party's agent, you should also carefully review their agency authority and identity.

23. Standard terms are more common in some businesses. Although the law stipulates the circumstances under which disputes arise in the understanding of standard terms, because it is more principled, it is still necessary to judge according to the specific content in practice. It is recommended to pay attention to the standard terms designed by the contract provider, read carefully, study carefully and ask the other party to explain, so as to avoid negating the validity of the standard terms through judicial procedures after signing.

24. Some contracts have blank underlined clauses to fill in. In practice, there are cases where only the main clauses are paid attention to and these clauses are ignored, and disputes are caused by unilateral filling. It is recommended to fill in the useful clauses completely, and mark the useless clauses as "no content" or cross them out.

25. In some contracts, the main clauses involving the rights and obligations of both parties are not clearly agreed. In practice, disputes caused by unclear agreements are more common. For example, if a product without quality standards such as coal is agreed to be "qualified in quality", and the performance behavior is agreed to be "delivery of relevant materials" or "handling of relevant procedures", etc., it is an unclear agreement. It is recommended to clarify it when signing the contract so as to exercise rights in accordance with the law when the other party does not perform properly.

26. Generally, a contract is established when all parties sign and seal it. In practice, there are many disputes caused by the signing and sealing of the final signature. It is recommended to clarify whether the signing and sealing is a single act that establishes the contract or whether the contract must be established at the same time. It is also recommended to indicate the signing time and add a seal on the seams of multiple pages if necessary.

27. Under normal circumstances, the contract should be held by each of the signing parties in one or several copies. In practice, one party to the contract indicates that it does not hold the contract. It is recommended to specify the total number of copies of the contract and the number of copies held by each party in the contract, and strictly hold them in accordance with the agreement. At the same time, be careful not to hand over the contract signed and sealed by yourself to the other party to take back for signing and sealing.

28. The validity or invalidity of a contract refers to whether the contract has legal effect, which is a legal judgment. The "effective" conditions indicated by the parties in the contract do not mean that the contract is naturally valid. In practice, there are a large number of disputes regarding the validity of the contract. The current judicial principle is to encourage market transactions, and all contracts that do not touch the bottom line of invalidity are valid. It is recommended to pay attention to whether the content of the contract involves franchising, whether it harms the public interest, not to sign in the name of internal institutions, and not to use fraudulent coercion, etc. when signing the contract.

29. In the course of business operations, it is inevitable to require the other party to provide certain guarantees. Common guarantee methods include guarantee, mortgage, pledge, and lien. In practice, there are many disputes caused by guarantee issues, involving many situations. If guarantee is selected, avoid using expressions such as "responsible for solving" or "responsible for coordination." It is recommended that the contract clearly state that the guarantor provides guarantee for the performance of the debt. If the guarantor is required to bear joint and several liability for repayment, it is recommended to indicate the words "joint and several guarantee," and it is also recommended to indicate the start and end time of the guarantee liability.

30. When providing mortgage guarantee with mortgaged property, there are many disputes caused by failure to register in practice. It is recommended to go to the relevant registration authority to handle the mortgage registration procedures at the same time as signing the mortgage contract or immediately after signing the contract. Only having a mortgage contract without going through the registration procedures will not be judged by the court to enjoy the right of priority in compensation. At the same time, it is recommended to sign a breach of contract clause in the mortgage contract for the situation of delaying or refusing to assist in handling the mortgage registration procedures, or agree to transfer to bear joint and several repayment liability.

31. If the other party provides pledge guarantee, it is recommended to clarify the ownership of the pledged property, as well as the brand, specifications, model, etc., and complete the handover procedures of the pledge guarantee or rights certificate with the pledgor. If pledge registration is required, be sure to complete the pledge registration in a timely manner.

32. Exercising creditor's rights by means of lien must comply with legal provisions, and is only applicable to goods possessed according to agreement in the case of storage contracts, transportation contracts, processing contracts, etc. It is recommended to clearly stipulate the right of lien in the contract. After the situation where the right of lien can be exercised occurs, the liened goods should be properly kept, and do not arbitrarily detain other items of the debtor, otherwise compensation liability will be borne.

33. Disputes are inevitable in the business operation process of enterprises. Choosing a dispute resolution institution when signing a contract can reduce dispute resolution time and costs. In practice, there are many disputes due to unclear dispute resolution locations or institutions. In judicial procedures, it is a jurisdictional objection. It is recommended to clearly agree on the judicial jurisdiction or choose a clear arbitration institution in the contract to reduce the possibility of the other party raising a jurisdictional objection due to unclear agreement.

Section 2: Contract Performance

34. Integrity is the foundation of the long-term development of an enterprise and the foundation of an entrepreneur. After the contract is signed, all parties have the obligation to strictly follow the agreement and fully perform the contract. It is recommended not to easily breach the contract on the grounds of changes in market conditions or failure to realize expected benefits. If force majeure or change of circumstances stipulated by law does occur, and continued performance will seriously damage one's own interests, a request to the people's court to exempt from liability for breach of contract or terminate the contract can be made in accordance with the law.

35. The information generated during the performance of the contract is the voucher for one's own accounting, the settlement between the two parties, and even the evidence for future disputes. In practice, there are many disputes caused by failure to pay attention to the preservation of information. It is recommended to pay attention to the written confirmation of the main performance behaviors by both parties during the performance of the contract, and properly keep the information proving the performance of the obligation, so as to avoid the situation of "empty words are no proof" in the litigation.

36. Payment is the main content of most commercial contracts. In practice, there are many disputes caused by payment methods and uses. It is recommended that, except for transactions with small amounts that can be settled in cash, settlements should be made through banks in accordance with national financial management requirements, and the purpose of the payment should be clearly marked. If it is indeed necessary to use other people's accounts for payment and collection, it should be confirmed by both parties or indicated on the voucher.

37. Quality issues are common core issues in sales contracts. In practice, there are situations where the buyer has not paid, so they do not raise quality objections in a timely manner, but wait for the seller to ask for payment before raising quality issues. It is recommended that the buyer inspect the goods in a timely manner after receiving them. If any non-conformity with the quality agreement is found, it should be raised immediately and resolved through negotiation to avoid exceeding the quality objection period, or the quality reasons cannot be determined due to "making do with it for now."

38. In the process of negotiating and performing contracts, enterprises often inevitably come into contact with the business information and even trade secrets of trading partners. Disclosure due to negligence will lead to disputes. It is recommended to raise awareness of protecting trade secrets. Be sure not to disclose or use this information during negotiation, contracting, performance, or even after performance, otherwise you may bear corresponding legal responsibilities.

39. For contracts with a long performance process or contracts with a large number of transactions, there may be situations where both parties have different opinions on whether the performance is appropriate and the contract is put on hold. In practice, there are disputes over how to deal with the continuous losses and who should bear them. It is recommended that in this case, measures should be taken in a timely manner to prevent the expansion of losses. Even if it is believed that the other party has breached the contract and one's own party has not breached the contract, one cannot ignore the gradually expanding losses because one is "justified." If the loss can be reduced but is allowed to expand, the court will not protect the expanded loss.

40. The statute of limitations is the legal protection period for a creditor to claim rights from a debtor. If the right is claimed beyond the statute of limitations, the people's court will not protect it. After the formal implementation of the "General Principles of the Civil Law," the statute of limitations for requesting the court to protect civil rights is generally three years. Creditors generally do not claim rights beyond the statute of limitations. In practice, disputes regarding the statute of limitations are mostly due to the creditor's failure to pay attention to the way of claiming rights. It is recommended that creditors raise their awareness of evidence, take ways that can clearly record the content of the collection to claim rights from the debtor, and pay attention to retaining evidence of the collection, so as to avoid the situation where the other party denies it in the litigation by only collecting by phone or other oral means.

Section 3: Dispute Resolution

41. Facts have proved that among the various ways to resolve economic disputes, the one that can truly achieve a win-win situation is self-reconciliation, which can solve problems, retain friendship, save costs, and shorten time. It is recommended that everyone try to choose methods such as chamber of commerce mediation and industry mediation to resolve disputes, and use litigation as the final method.

42. Although civil litigation has authority and enforcement power, compared with mediation, it has the disadvantages of more procedures, high costs, and long cycles, which are the natural attributes of judicial procedures. Once involved in litigation, it is recommended that everyone correct their attitude, trust the law, trust the judge, and exercise their rights in accordance with the procedures prescribed by law.

43. Arbitration has the characteristics of professionalism, flexibility, confidentiality, speed, economy, independence, and finality of award. It is recommended that when signing a contract, arbitration can be used as a way to resolve disputes. If you forget to stipulate an arbitration clause in the contract, signing a separate arbitration agreement can also achieve the purpose of submitting to arbitration.

44. Law is a social science, and applying the law is a technology. Many entrepreneurs often only focus on commercial profit points and do not pay attention to legal risk points. It is recommended to consult legal professionals in all important aspects of business activities, especially in litigation, adhere to the correct litigation strategy, design reasonable litigation requests, and exercise litigation rights in accordance with the law, which can avoid multiple litigations and effectively protect their legitimate rights and interests.

45. The objectively existing facts may not be completely restored through litigation. In practice, cases of losing lawsuits due to lack of evidence are relatively common, mainly because of the aforementioned failure to pay attention to the preservation of information and vouchers, resulting in the court rejecting the lawsuit request due to insufficient evidence after the lawsuit is involved. In addition to suggesting that evidence awareness should be raised in the business process, it is also necessary to view the litigation results objectively and rationally, and understand the legal rules and the work of the court.

46. A court judgment with content to be executed becomes enforceable upon its effective date. If you are involved in a lawsuit and are judged to bear civil liability, it is recommended to automatically fulfill the obligations according to the content and time limit determined in the judgment. If you have the ability to fulfill but refuse to do so, your property will be subject to compulsory execution, and the individuals concerned may also be included in the list of dishonest persons according to the specific circumstances, which will affect the reputation and normal life of themselves and their families. Those with serious circumstances may also be held criminally responsible.

47. In recent years, the impact of service issues on litigation efficiency has become increasingly significant. It is recommended to indicate contact information or addresses in the contract, and clearly agree that it can be used as a judicial service address in future litigation. In addition, the law stipulates a situation called 'deemed service'. It is recommended that after a lawsuit, do not evade or refuse to accept the court's service, but face it correctly and actively respond to it.

Section 1: Financial Loans

48. Financing is essential for private enterprises during their operations. Loan disputes involving private enterprises are very common in practice, which is normal. Based on our experience in adjudication, lending practices of financial institutions are relatively standardized. Therefore, it is recommended to apply for loans from financial institutions whenever possible.

49. Private enterprises should carefully read and prudently sign loan contracts. There are many standard clauses in financial loan contracts, and there are also many fill-in-the-blank clauses. It is recommended to carefully study the standard clauses in the contracts provided by banks or other financial institutions and ask the other party to explain them. It is also recommended to fill in all the fill-in-the-blank clauses and cross out the useless parts.

50. In the process of performing financial loan contracts, the reason why banks sue borrowers is mostly because the borrowers are unable to repay when due. The common defense opinions of borrowers are that they admit the loan but are unable to repay. It is recommended that private enterprises plan the source of funds for repayment when borrowing, and use the funds according to the agreed purpose after borrowing, and do not use them for other purposes, let alone re-lend them to others after raising interest rates.

51. It is common for private enterprises to provide guarantees for borrowers of loan contracts. If the borrower cannot repay when due, the guarantor will bear the agreed guarantee responsibility, which essentially increases the debt burden of the enterprise. It is recommended not to provide guarantees for friendship or help. If it is necessary to provide a guarantee, it is recommended to negotiate with the borrower and ask the borrower to provide a corresponding counter-guarantee.

52. Many guarantors do not carefully read the guarantee contract when providing a guarantee, but only sign and seal it according to the bank's instructions. It is recommended to carefully review the loan contract and guarantee contract content when providing a guarantee, understand the amount you are guaranteeing, and understand whether the loan is used to borrow new money to repay old debts. If it is to borrow new money to repay old debts, it means that the borrower's ability to repay has already had problems, so it is recommended to consider it carefully.

53. It constitutes a crime for a borrower to obtain a bank loan by providing false materials or forging materials. The enterprise as a guarantor still has the risk of bearing civil liability. It is recommended to follow the operating specifications and work procedures as much as possible, and not participate in the production or submission of false materials. When bank staff or other enterprises require or imply that making fake materials is the only way to issue a loan, they should clearly refuse and retain relevant evidence to avoid getting involved in criminal cases.

54. Enterprises should fully understand the legal risks in mutual guarantees and joint guarantees, and carefully choose mutual guarantee and joint guarantee loans. When small and medium-sized enterprises apply for loans, they are sometimes required by bank staff to provide guarantees for a customer enterprise of the bank that is not operating well. It is recommended that enterprises do not provide such guarantees in order to obtain loans, and should clearly refuse.

Section 2: Private Lending

55. Although the law does not prohibit private lending, enterprises and individuals who do not have the qualifications to lend money may be suspected of illegal business operations if they lend money to others for a long time, repeatedly, and in large amounts. It is recommended that lending funds be limited to helping others with temporary turnover. If interest is charged, it should be declared and taxed to the tax authorities.

56. When a private enterprise re-lends funds obtained from borrowing from other enterprises or raising funds from its own employees to others for profit, or obtains credit funds from financial institutions and then re-lends them to borrowers at high interest rates, the enterprise may face legal consequences such as the loan contract being invalid and involving criminal offenses. It is recommended that borrowing between enterprises should be limited to the enterprise's idle funds.

57. The creditor's rights and debts formed in the process of contract performance may sometimes be converted into loans through negotiation between the two parties. In this case, it may not be protected because there is no actual lending relationship. It is recommended that enterprises confirm the debts in writing after settlement for debts arising from other legal relationships, and properly retain relevant evidence of the underlying relationship.

58. Private enterprises should pay close attention to the issue of interest when borrowing from enterprises with lending qualifications such as small loan companies. For small loan companies that collect upfront fees in advance, it is recommended to retain evidence of the actual amount received; the excess part of the interest repaid this time should be deducted from the principal, and the compound interest calculation should be contractually agreed and should not exceed the statutory upper limit. It is recommended to retain evidence of interest payments to determine the payment time and amount.

59. The formulation and modification of enterprise rules and regulations must follow the democratic procedures of the Labor Contract Law, must be publicized to employees, and the content must comply with the provisions of the law, otherwise the rules and regulations will not be used as the basis for enterprise employment management, and the enterprise will also face the risk of employees requesting to terminate the labor contract at any time and claiming economic compensation. It is recommended to retain written evidence of the employee representative assembly or all employees discussing and negotiating the rules and regulations, and retain employee handbook receipt records, rules and regulations training sign-in records, and rules and regulations exam papers.

60. Establish the concept of signing a contract before employing workers, and a labor contract must be signed within one month from the date of employment at the latest; if the employee continues to work in the employer after the labor contract is terminated, a contract should also be signed within one month. If a written labor contract is not signed with the employee, the employee has the right to request the enterprise to pay double wages, and can resign at any time without bearing any liability for breach of contract. If the employee refuses to sign a labor contract, it is recommended to retain relevant evidence such as a notice to the employee requesting to sign a contract, so as to avoid the risk that the employee is unwilling to sign a written labor contract with the enterprise and then requests the enterprise to pay double wages afterwards.

61. In order to prevent senior managers, senior technicians and other personnel with confidentiality obligations from engaging in business that belongs to the restriction of competition after leaving their jobs, it is recommended to agree with them on the confidentiality of trade secrets and intellectual property-related matters, and sign a non-competition clause at the same time, clarifying the scope, region and duration of the non-competition restriction, and providing compensation within the non-competition restriction period.

62. If an enterprise arranges for employees to work overtime, it shall pay overtime wages. For employees who need to implement an irregular working hour system and a comprehensive calculation of working hours due to the nature of the work and the characteristics of the job, it is recommended to apply to the labor administrative department for approval in accordance with the law, and at the same time pay attention to retaining attendance records confirmed by the employees, so as to avoid difficulties in providing evidence when disputes occur over the fact of overtime.

63. It is recommended to pay social insurance premiums for employees in a timely manner in accordance with the law, otherwise the enterprise may face the risk of employees requesting to terminate the labor contract on this ground and requesting payment of economic compensation.

64. It is recommended that when an enterprise changes the agreed job position, salary and other contents of the labor contract with the employee, it must record the changes in writing through written labor contracts, salary slips, job change notices and other written forms, and have them confirmed by the employee, so as to bear the burden of proof for the legality and rationality of adjusting the employee's job position and salary in the event of a dispute.

65. Companies have the unilateral right to terminate labor contracts with employees during the probation period. It is recommended to clearly define the employment conditions and publicize them to employees through methods such as sending employment letters, stipulating them in labor contracts, and specifying them in company rules and regulations. It is also recommended to conduct assessment work during the probation period and terminate contracts with employees who do not meet the employment conditions in a timely manner; otherwise, higher dismissal costs will need to be paid after the probation period.

66. Companies have the unilateral right to terminate labor contracts in situations where employees seriously violate rules and regulations. It is recommended to make clear and quantifiable provisions for situations such as serious violations of discipline and significant damages in the company's rules and regulations or employee handbook. At the same time, attention should be paid to retaining factual evidence of employees' serious violations of discipline, significant damages to the company, and serious impacts, in order to avoid the inability to provide evidence in the event of a dispute.

67. When companies terminate or end labor contracts with employees, they should terminate or end them in accordance with the circumstances and procedures stipulated by law, and should pay economic compensation to employees in a timely manner in accordance with the law; otherwise, they will face penalties of paying an additional 50% to 100%, or even double the economic compensation.

68. The unilateral termination of a labor contract by an employee is a right conferred by law. Companies must not only protect their freedom to resign in accordance with the law, but also pay attention to regulating their resignation behavior. It is recommended to retain written evidence such as resignation letters submitted by employees to prove whether the employee has exercised the right to terminate the contract in accordance with the law.

69. If the employer fails to submit the employee's name and file to the social insurance agency within the prescribed time limit after the termination of the labor relationship, resulting in the employee's inability to enjoy unemployment insurance benefits, the employer shall be liable for compensation. It is recommended to submit the application in a timely manner after the termination of the labor relationship.