If the subject of the contract is unqualified, the contract is not formed. The establishment of a contract must have the participation of a qualified subject. If the subject is not qualified, the contract cannot be established at all, let alone become effective.
According to Article 18 of the Labor Law, "An invalid labor contract has no legal binding force since it was concluded."
When an employer signs a labor contract with a worker, it should pay attention to the subject qualification. A labor contract signed between an unincorporated organization and a worker is invalid. Legal entity units can also handle authorization and entrustment with their non legal entity organizations, and then sign labor contracts with workers, so as to avoid the problem of illegal subject of employers.
