Research on the Qualifications of Employee Directors under the New Companies Law

Abstract

The new Companies Law, which came into effect in July 2024, adjusted the rules for the establishment of employee directors of limited liability companies and expanded the scope of application of employee directors. On the premise that the new Companies Law provides a framework for employee directors, the legal norms relating to the qualifications of employee directors are ambiguous.The lack of uniform provisions on the prohibition of concurrent employment of employee directors and on candidates for employee directors has led to confusion in practice as to the criteria for companies to apply to the qualifications of employee directors. This is not conducive to the long-term development of the employee directorship system. Therefore uniform provisions should be clearly set out for the persons prohibited from holding concurrent positions as employee directors and the candidates for employee directorship, with further explanations of the eligibility criteria, to give full play to the effectiveness of employee directorships.