LW6134 Chinese and Comparative Company Law
practice note Mainland China English original

Direct Compensation Liability of Directors and Senior Executives to Third Parties under Article 191

Explains the revised Company Law's Article 191 system for direct third-party compensation claims against directors and senior executives, including legal representatives where relevant.

Open source

Brief English Introduction

This note explains how Article 191 gives harmed third parties a more direct path to compensation from directors and senior executives who act intentionally or with gross negligence while performing duties. It helps students separate company attribution from personal responsibility for serious misconduct.

Use It For

Use it when discussing whether legal representative risk should remain indirect through the company or become direct to outsiders.

Teaching Notes

Ask students whether Article 191 is best understood as creditor protection, tort responsibility, or a duty-of-care enforcement device.