Consequences for partners violating non-competition

Legal Subjectivity:

Case: Mr. Li and Hao each contributed 100,000 yuan to jointly open a cigarette hotel called Fushun Changyan Hotel. After the store opened, its operating conditions were quite good, with a monthly profit of 20,000 yuan. Seeing the huge profits, Hao and Liu invested another 150,000 yuan each to open the Ruifuxiang Cigarette Hotel in a store a street away. Because the Ruifuxiang store is well-decorated, large-scale, and located in a location with concentrated customer flow in the neighborhood, part of the customer base of Fushun Changyan Hotel was soon diverted away, causing losses to Mr. Li, while Hao gained income from Ruifuxiang. made huge profits. Mr. Li's negotiations with Hao failed, and he wanted to know how to protect his partnership rights. Answer: Hao’s behavior violated the non-competition provisions of the partnership and he should be liable for compensation. According to the provisions of the "Partnership Law of the People's Republic of China", "Partners shall not operate on their own or in cooperation with others any business that competes with the partnership. Unless otherwise agreed in the partnership agreement or with the consent of all partners, Partners shall not conduct transactions with the partnership. Partners shall not engage in activities that harm the interests of the partnership." This is a prohibitive provision made by the law to protect the legitimate rights and interests of partners, and is legally called a non-competition. After Hao partnered with Mr. Li to operate a cigarette shop, in order to obtain greater profits, he partnered with others to set up another larger cigarette shop in the surrounding area. His behavior violated the above-mentioned legal provisions and infringed on Mr. Li's rights. Legitimate interests. Reminder: The "Partnership Law of the People's Republic of China" stipulates that "if a partner violates the provisions of this law or the partnership agreement and engages in business that competes with the partnership or conducts transactions with the partnership, the income shall belong to the partnership." It is owned by a partnership enterprise; if it causes losses to the partnership enterprise or other partners, it shall bear the liability for compensation in accordance with the law." Therefore, Mr. Li can negotiate a settlement with Hao, or he can directly file a lawsuit with the People's Court after collecting relevant evidence.

Legal objectivity:

Article 23 of the "Labor Contract Law" stipulates that the employer and the employee may agree in the labor contract to keep the employer's business secrets and intellectual property rights Relevant confidentiality matters. For employees who have the obligation to keep confidentiality, the employer may agree on a non-competition clause with the employee in the labor contract or confidentiality agreement, and agree that after the labor contract is terminated or terminated, the employer will provide the employee with financial aid on a monthly basis during the non-competition period. compensate. If an employee violates the non-compete agreement, he or she shall pay liquidated damages to the employer in accordance with the agreement.