Viewpoint... Lawyers handle the company's own liquidation and cancellation of specific steps and operations-under the background of the new Company Law.

In the process of self-liquidation of the company, the applicable laws and regulations are mainly:

(1) the People's Republic of China Civil Code

Companies Act of the People's Republic of China (as amended in 2023)

3. Enterprise Income Tax Law of the People's Republic of China

4. Regulations on the Administration of Registration of Market Entities

In addition to the above-mentioned laws and regulations, the "Labor Contract Law" and "Civil Procedure Law" may be involved in the actual operation of the company's self-liquidation.

A liquidation obligor is a subject who is legally obligated to initiate liquidation proceedings after the dissolution of a legal person, and its obligation is to initiate liquidation proceedings in a timely manner in accordance with the law to terminate the legal person. The members of the liquidation group are not equivalent to the liquidation obligors.

Article 232 of the new "Company Law" stipulates: "Directors are the liquidation obligors of the company and shall form a liquidation group for liquidation within 15 days from the date of occurrence of the cause of dissolution. The liquidation group shall be composed of directors, unless otherwise stipulated in the company's articles of association or the shareholders' meeting resolution to elect another person. At the same time, the liquidation obligors shall be liable for compensation if they fail to fulfill their liquidation obligations in time and cause losses to the company or creditors."

As can be seen from the above provisions, the liquidation obligor of self-liquidation shall be the director.

Article 229 of the new "Company Law" stipulates: "The company is dissolved for the following reasons: (1) The business period specified in the company's articles of association expires or other reasons for dissolution specified in the company's articles of association appear; the (II) shareholders' meeting resolves to dissolve; the (III) is due to The company's merger or division needs to be dissolved; the (IV)'s business license is revoked, ordered to close down or revoked according to law; the (V) People's Court shall dissolve in accordance with Article 231 this law. If a company has a cause of dissolution as provided in the preceding paragraph, it shall, within ten days, publicize the cause of dissolution through the State Enterprise Credit Information Disclosure System."

Article 237 of the new Company Law stipulates: "If the liquidation group finds that the company's property is insufficient to pay off its debts after liquidating the company's property and preparing the balance sheet and property inventory, it shall apply to the people's court for bankruptcy liquidation in accordance with the law. After the people's court accepts the bankruptcy application, the liquidation group shall transfer the liquidation affairs to the bankruptcy administrator designated by the people's court."

According to the above provisions, self-liquidation should comply with the provisions of paragraphs (I) to (III) of Article 229 of the new Company Law, and should also meet the conditions that the company's assets are sufficient to pay off its debts.

According to Articles 232, 234, 235, 236, 239, 240 and 341 of the new Company Law, there are two types of self-liquidation procedures: one is general procedure; the other is summary procedure.

1. Formation of liquidation group

Article 232 of the new "Company Law" stipulates that the directors are the company's liquidation obligors and shall form a liquidation group to liquidate within 15 days from the date of the dissolution. The liquidation group shall be composed of directors, unless the articles of association provide otherwise or the shareholders' meeting adopts a resolution to elect another person.

2, notice, announcement creditors.

Article 235 of the new "Company Law" stipulates that the liquidation group shall notify the creditors within 10 days from the date of its establishment, and make an announcement in the newspaper or the national enterprise credit information publicity system within 60 days. Creditors shall declare their claims to the liquidation group within 30 days from the date of receiving the notice, or within 45 days from the date of the announcement if they have not received the notice.

When filing a claim, a creditor shall explain the relevant matters of the claim and provide supporting materials. The liquidation group shall register the claims.

During the declaration of claims, the liquidation group shall not pay off the creditors.

Article 32 of the Regulations on the Administration of Registration of the People's Republic of China Market Entities stipulates that if a market entity shall be liquidated according to law before cancellation of registration, the liquidation group shall announce the list of members of the liquidation group and the person in charge of the liquidation group through the national enterprise credit information publicity system within 10 days from the date of establishment. The liquidation group may issue a creditor announcement through the national enterprise credit information publicity system.

3, clean up the company's property, develop a liquidation plan.

Article 236 of the new "Company Law" stipulates that after liquidating the company's property, preparing the balance sheet and property list, the liquidation team shall formulate a liquidation plan and report it to the shareholders meeting or the people's court for confirmation. The remaining property of the company after paying the liquidation expenses, the wages of the employees, the social insurance expenses and the statutory compensation, paying the taxes owed and paying off the debts of the company shall be distributed by the limited liability company according to the proportion of the capital contribution of the shareholders, and the limited liability company shall be distributed according to the proportion of the shares held by the shareholders.

During the liquidation period, the company shall survive, but shall not carry out business activities unrelated to liquidation. The property of the company shall not be distributed to the shareholders until it has been paid off in accordance with the provisions of the preceding paragraph.

Specific operation steps are:

(1) The liquidation group shall clean up the company's property. Prepare balance sheets, property lists and catalogues of claims and debts based on claims declarations, due diligence and property liquidation.

(2) Formulate a liquidation plan, propose specific arrangements for the collection of claims and the settlement of debts, and submit them to the shareholders' meeting for confirmation. The liquidation group shall not implement the unconfirmed liquidation plan, otherwise the members of the liquidation group shall be liable for compensation if losses are caused to the shareholders or creditors of the company.

(3) If it is found to be insolvent, the liquidation group shall immediately apply to the people's court with jurisdiction to declare bankruptcy. If the people's court decides to declare bankruptcy, the liquidation group shall transfer the liquidation affairs to the people's court.

4, the settlement of the company's claims and debts.

(1) To deal with the outstanding business of the company in connection with liquidation.

(2) Collection of corporate claims. The liquidation group shall promptly request the company's debtors to pay off the company's claims that have matured and negotiate the handling of the outstanding company's claims.

(3) Paying off the company's debts.

5, the distribution of the company's remaining property.

After paying off all the company's debts, if there is any property remaining, it shall be distributed among the shareholders in proportion to the capital contribution of each shareholder.

6. Making liquidation report

After the liquidation, a liquidation report shall be prepared and attached to the statement of income and expenditure during the liquidation period and its various financial books, which shall be submitted to the shareholders' meeting for confirmation.

7. Application for cancellation of company registration

The liquidation group of the Regulations on the Administration of Registration of the People's Republic of China Market Entities shall apply to the registration authority for cancellation of registration within 30 days from the date of completion of liquidation. Before a market entity applies for cancellation of registration, it shall handle the cancellation of registration of a branch in accordance with the law.

Article 240 of the new "Company Law" stipulates that if a company has not incurred debts during its existence, or has paid off all debts, the company registration may be canceled through a summary procedure in accordance with the provisions upon the commitment of all shareholders.

The cancellation of company registration through summary procedures shall be announced through the national enterprise credit information publicity system, and the announcement period shall not be less than 20 days. After the expiration of the announcement period, if there is no objection, the company may apply to the company registration authority for cancellation of company registration within 20 days.

If the company cancels the company registration through a summary procedure, and the shareholders make false promises to the contents specified in the first paragraph of this article, they shall bear joint and several liabilities for the debts before the cancellation of registration.

Article 33 of the Regulations on the Administration of Registration of the People's Republic of China Market Entities stipulates that market entities have not incurred claims and debts or have paid off their claims and debts, and have not incurred or settled liquidation expenses, employee wages, social insurance expenses, statutory compensation, and payable If the tax payment (late fees, fines) is paid, and all investors promise in writing to bear legal responsibility for the authenticity of the above situation, the cancellation of registration may be handled in accordance with summary procedures.

Market entities shall publicize the letter of commitment and the application for cancellation of registration through the national enterprise credit information publicity system for a period of 20 days. If no relevant departments, creditors and other interested parties raise objections during the publicity period, the market entity may apply to the registration authority for cancellation of registration within 20 days from the date of expiration of the publicity period.

If the cancellation of a market entity is subject to approval in accordance with the law, or if the business license of the market entity is revoked, ordered to close or cancel, or is included in the list of business abnormalities, the simple cancellation procedure shall not apply.

1, summary procedure applicable circumstances.

(1) No claims or debts have been incurred or paid off;

(2) No settlement expenses, employee wages, social insurance expenses, statutory compensation, and taxes payable (late fees, fines) have not occurred or have been settled;

(3) There are no circumstances in which the cancellation of the company is subject to approval in accordance with the law, or the company's business license is revoked, ordered to close down, revoked, or included in the list of business anomalies.

2, simple procedure operation steps

(1) Log in to the official website of the National Enterprise Credit Information Publicity System, click "Enterprise Information Filling", select the location of the enterprise registration authority, and log in.

(2) After logging in, you need to upload the "Letter of Commitment for All Investors" according to the prompt content to show the announcement (replacing the traditional newspaper announcement). The "Letter of Commitment of All Investors" needs to be signed and sealed by all investors (if it is a natural person, it needs to be signed by himself and cannot be signed on behalf of others).

(3) Within 20 days from the date of expiration of the announcement, the enterprise can bring the "Application Form", "Power of Attorney for Designated Representative or Co-Entrusted Agent" (the form can be downloaded from the website of the State Administration for Industry and Commerce), and the "Letter of Commitment for All Investors" "(must be the original of the uploaded announcement), and the original copy of the business license to the local business license registration authority to submit the application, the registration authority will make a decision on whether to grant the simple cancellation of registration within 3 working days in accordance with the law.

If the directors are the company's liquidation obligors, they shall form a liquidation group to liquidate the company within 15 days from the date of the dissolution. If the liquidation obligor fails to perform the liquidation obligation in time and causes losses to the company or creditors, he shall be liable for compensation.

If the company shall be liquidated in accordance with the provisions, and if it fails to establish a liquidation group within the time limit or does not liquidate after the establishment of a liquidation group, the interested party may apply to the people's court to designate relevant personnel to form a liquidation group to carry out liquidation. The people's court shall accept the application and promptly organize a liquidation group to carry out liquidation.

Therefore, if a director fails to perform his liquidation obligations and causes losses to the company or creditors, he shall be liable for compensation. The company is not liquidated in time and may change from self-liquidation to compulsory liquidation. The directors shall perform their liquidation obligations in a timely manner when the company is liquidated.

Articles 18 and 19 of the (II) Provisions of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Company Law (2020 Amendment) stipulate that creditors may require the liquidation obligor to bear the debts that have not yet been repaid after the cancellation of the company.

If the company is canceled without liquidation and cannot be liquidated, the creditor may require the liquidation obligor to bear joint and several liability for the company's debts. If the liquidation obligor fraudulently prepares a false liquidation report to defraud the company's cancellation of registration after the dissolution of the company, the creditor may require the liquidation obligor to bear the corresponding liability.

If the company has not been liquidated in accordance with the law, the shareholders or third parties undertake to be liable for the company's debts when the company is registered for cancellation at the company registration authority, and the shareholders or third parties shall bear corresponding civil liability to the creditors for the company's debts.

Therefore, the company should strictly perform the corresponding liquidation procedures in accordance with the law before the cancellation, and can only go through the cancellation registration after the liquidation is completed.

Article 235 of the new "Company Law" stipulates that the liquidation group shall notify the creditors within 10 days from the date of its establishment, and make an announcement in the newspaper or the national enterprise credit information publicity system within 60 days. Creditors shall declare their claims to the liquidation group within 30 days from the date of receiving the notice, or within 45 days from the date of the announcement if they have not received the notice.

Article 11 of the (II) Provisions of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Company Law (2020 Amendment) stipulates that the liquidation group fails to perform the notification and announcement obligations in accordance with the provisions of the preceding paragraph, resulting in the creditor's failure to declare the creditor's rights in time and not being paid off. If the members of the liquidation group are liable for compensation for the losses caused by this, the people's court shall support them in accordance with the law.

Therefore, when the company liquidates itself, the liquidation group shall strictly perform the corresponding notification and announcement obligations in accordance with the law.

In the process of self-liquidation of the company, if the liquidation plan prepared by the liquidation group is not carried out in accordance with the order of settlement prescribed by law, causing losses to the enterprise or creditors, the liquidation group shall be liable for compensation.