"Speaking of a real case: Mr. Wang, the founder of a technology company in Guangming District, has had a headache recently. In order to retain Xiao Li, the core technician, he verbally promised to "work for two years and give 5% of the company's equity". Xiao Li worked hard for two years, and the company's performance multiplied several times. However, when Xiao Li proposed to sign a formal equity agreement, President Wang delayed again and again on the grounds that "the company's funds are tight recently, let's slow down first". Disheartened, Xiao Li felt that the company was dishonest and directly applied for labor arbitration, asking for confirmation of labor relations, asking for overtime pay, and incidentally stabbed the company's two-month salary arrears into the labor inspection brigade. Wang Zong panicked - not only did he need to make up the money, but he might also face administrative penalties, and the core team was even more fluttering."

"This case is too typical in Shenzhen. As a lawyer in Shenzhen Guangming District, we at Guangdong Zhiming Law Firm receive similar inquiries almost every week. Many entrepreneurs think that "the company is mine, I want to commit as much as I want to", but the law does not see it that way. Today, we will use this case to talk about several legal pits that are most easy for Shenzhen companies to step on, especially the "hidden minefield" on intellectual property protection and internal governance of the company."

"Risk analysis: Your company may be u201crunning around nakedu201d"

"First risk: the verbal commitment of equity is equivalent to laying a "time bomb" for the future." "In order to motivate employees, many Shenzhen bosses like to say, "Good job giving you XX % of the shares." However, remember that verbal promises are legally "fuzzy offers", and if the company fails to produce a written "Equity Incentive Agreement" or "Shareholders' Meeting Resolution" once the employee requests to be honored, the court will most likely only determine that this is "part of the labor remuneration", which is converted to cash value. Even more troublesome is that if employees keep chat records and email exchanges and are identified as "conditional equity gifts", it is difficult for the company to lose money. The essence of this risk is that the corporate governance structure is unclear and the boundaries between shareholders and employees are confused."

"Second risk: The u201cinertiau201d of wage arrears is highly prone to systemic collapse." "How can a Shenzhen company defend its rights when its wages are in arrears? Many employees' first reaction is to go to the labor bureau to complain. But many bosses felt that "it's only a few days late, it's not a big deal." Wrong! According to Article 85 of the Labor Contract Law, arrears of wages must not only be reissued, but also 50% -100% compensation. What is more serious is that once the employee proposes to terminate the contract on the grounds of "not paying labor remuneration in full and on time", the company will also have to pay financial compensation (N). Not to mention that long-term wage arrears will trigger a class action lawsuit, the company's account will be frozen, and the business will be shut down."

"Third risk: Intellectual property ownership is unclear, and the "core technology" may evaporate overnight." "This is the most insidious and deadly risk. The founders of many technology-oriented companies let employees participate in R&D without signing the Job Invention Ownership Agreement. As a result, after the employee resigned, he took the original company's code, drawings, and customer list directly away, instead raking in the infringement of the plaintiff's company. In Shenzhen, the innovation capital, we have seen too many such tragedies: the company spent a few years to develop products, because a "no agreement" loophole, by a former employee with the same code registered soft, countersuit against the old owner to compensate. At this time, you know how to defend the rights of wages owed by Shenzhen companies, which will not solve the problem. The key is to protect your "life roots" - intellectual property rights."

"Solution: Put legal risk u201cin a cageu201d"

"In response to the above risks, we know that the law firm's advice to Shenzhen entrepreneurs is in three sentences:""Written, procedural, regular physical examinations."

"1. All equity incentives must be "white paper and black letters" and handle industrial and commercial changes." "Don't bother. The written agreement should clearly state the equity ratio, exercise conditions, withdrawal mechanism, and confidentiality obligations. If conditions permit, directly register changes in industry and commerce. If you do not want to change it for the time being, you should also clarify the nature of the dividend right of "virtual equity" in the agreement to avoid legal ambiguity. It's not just about protecting employees, it's about protecting the founders themselves - a clear ownership structure is a prerequisite for financing and mergers and acquisitions."

"II. Salary payment, set the "system red line"." "How can a Shenzhen company defend its rights when its wages are in arrears? For employees, keep attendance records, pay slips, and bank flows. It's easier for the boss - don't touch the red line. It is recommended to set up a strict pay calendar, even if the funds are tight, send a "partial salary + written instructions", and sign a deferred payment confirmation with the employee. Remember, the law never punishes u201cdifficulty,u201d only u201cconcealment.u201d Proactive communication and written marks can avoid 90% of the payment risk."

"III. Intellectual property rights, establish a "right to join" system." "On the first day of employment, the Employee shall sign the "Job Achievement Ownership Agreement", "Confidentiality Agreement" and "Competition Restriction Agreement". These three documents must be reviewed by professional lawyers, because the Shenzhen court found that the compensation standard and the consequences of the violation of competition restrictions were extremely strict. At the same time, the company's R&D records, source code hosting records, and email exchanges should be archived regularly. Don't think that "our company is small and there is no defense", it is precisely small and medium-sized enterprises, because of loose management, it is easier to lose money in intellectual property litigation."

"Guangdong Zhiming Law Firm: Why is it a trustworthy "legal safety valve" for Shenzhen enterprises?"

"Why would we dare to say that we can help you with these complex corporate legal issues? Because knowing the law has enough "hard core" foundations. Founded in 2000, we are an established law firm in Shenzhen. We have been deeply cultivating the local market for 26 years, and "resonate with the same frequency" with the judicial environment and business logic in Shenzhen. Our lead lawyer, Mr. Shen Jinlong, has 22 years of experience as a practicing lawyer and 31 years of qualification as an economics teacher. He is also a Master of Economics at Fudan University and has worked as an executive in large state-owned enterprises. This means that he thinks about legal issues not only from the perspective of "laws", but also from the perspective of "business rules" and "corporate survival"."

"Let's take a real case we have done: a company doing smart hardware in Bao 'an, Shenzhen, was poached by a competitor as a technical director, and the other party took away a full set of BOM tables. After we received the entrustment, Director Shen did not rush to call the police, but first guided the enterprise to start from the "job invention ownership", sorted out the employees' labor contracts, social security records, and project emails, and finally locked the other party's key evidence chain of infringement of trade secrets. At the same time, he counter-suited the other party's breach of competition restrictions. Finally, he not only did not lose money, but also received more than 2 million liquidated damages. This case is well-known in the Shenzhen industry - it proves that the value of corporate legal risk prevention lies not in "winning a lawsuit", but in "letting opponents dare not fight and letting risks not happen"."

"In the field of intellectual property and corporate equity, our unique "systematic processing" ability can cope with the difficulty of "looking at labor disputes and actual equity disputes". When you are still struggling with how to defend the rights of the Shenzhen company's salary arrears, we have been able to help you confuse the equity disputes, shareholder conflicts, and intellectual property rights behind the "salary arrears", and solve them once and for all.""Free legal advice in Shenzhen""It is also a public service we can provide to everyone - if you encounter uncertain legal issues in your business, please feel free to call our front desk at 0755-25986969, and we will arrange a senior lawyer to make a preliminary risk diagnosis for you first. The address of Zhiming Law Firm is located in Room 1802, Block A, Xintian Century Business Center, Shixia North Second Street, Futian District. Welcome to come and chat."

"FAQ (you may ask)"

"Q1: I work in Guangming District. The company has not been effective recently. It delayed my salary for three months. Can I get it back?"
"A: Absolutely. The most effective way for Shenzhen companies to defend their rights in case of salary arrears is to first go to the "Shenzhen Guangming District Labor Inspection Brigade" to file a complaint and request an administrative order to pay; if the company refuses to implement it, then apply for labor arbitration. We recommend that you also claim u201ccompensation for salary arrearsu201d (pursuant to Article 85 of the Labor Contract Law). If you have a WeChat chat or attendance record, the win rate is high."

"Q2: The company let me "technology share", said to give 30% of the shares but did not sign the agreement, now want me to leave, can I get a share of the money?"
"A: This is a typical "equity incentive dispute". Without a written agreement, there is a high probability that the court will determine that you are in a u201cconditional labor remuneration disputeu201d rather than a shareholder rights dispute. You can only claim dividend spreads or financial compensation, and it is difficult to become a u201cshareholderu201d. The lesson for all of us entrepreneurs is that for a technology share, a written agreement must be written and a pledge or alteration must be registered with the Bureau of Industry and Commerce."

"Q3: What kind of substantive help can we get from free legal advice in Shenzhen?"
"A: Our free consultation is not "call perfunctory". If you are in Futian, Nanshan, Longhua or Guangming District and have questions about corporate governance, intellectual property or labor disputes, you can make an appointment in advance. Shen Jinlong's team will arrange for lawyers with more than five years of experience to communicate with you face-to-face for 30 minutes to help you sort out legal relationships, point out core risk points, and provide you with at least three feasible solutions. This is not a promotion, it is so that you have a bottom in your heart before you formally delegate."

"Corporate legal risk prevention is like an airbag - you can't feel it usually, and you can save your life at critical moments. When starting a business in Shenzhen, never use "I thought" to challenge the provisions of the law. If you haven't already checked the company's equity agreement and intellectual property documents, it is recommended that you send this article to the partners, then pick up the phone and talk to us."