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| Category | FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION | Organ of Promulgation | The State Council | Status of Effect | In Force |
| Date of Promulgation | 1996-07-09 | Effective Date | 1996-07-09 |
|
Measures for Liquidation of Foreign Investment Enterprises |
|---|
Chapter I General Provisions
Chapter II Ordinary Liquidation
Section 1 Term of Liquidation
Section 2 Liquidation Organization
Section 3 Notice and Announcement
Section 4 Claims, Debts and Clearing
Section 5 Assessment and Disposition of Assets Subject to Liquidation
Section 6 The Closing of Liquidation
Chapter III Special Liquidation
Chapter IV Legal Liabilities
Chapter V Supplementary Provisions Article 1 These Measures are formulated, according to provisions of Article 2 These Measures shall apply to liquidation of Chinese-foreign Enterprises declared bankruptcy in accordance with the law shall be Article 3 Enterprises that can form a liquidation committee to conduct Where an enterprise cannot form a liquidation committee to conduct Where an enterprise is ordered to be closed down and so is dissolved, the Article 4 Liquidation of enterprises shall be conducted in accordance Section 1 Term of Liquidation Article 5 The date on which the period of operations of the enterprise Article 6 The term of liquidation of an enterprise shall be 180 days, When there is a need to extend the term of liquidation due to some Article 7 In its term of liquidation, an enterprise may not develop new Section 2 Liquidation Organization Article 8 The organ of power of the enterprise shall organize and Article 9 The liquidation committee shall be composed of at least three The liquidation committee shall have a chairman, which shall be appointed Article 10 If any of the following circumstances occurs in duration of (1) The member of the liquidation committee has committed illegal (2) Any creditor requests with justified reasons the member of the (3) The member of the liquidation committee has died or has lost Article 11 During liquidation, the liquidation committee shall exercise (1) Liquidate the assets of the enterprise, work out a balance sheet and (2) Inform unknown creditors by announcement and notify the known (3) Dispose of and liquidate relevant unfinished business of the (4) Give the basis for valuing and calculating the assets; (5) Pay off taxes owed by the enterprise; (6) Clear up claims and debts; (7) Dispose of, after paying off the debts of the enterprise, its (8) Participating in civil lawsuits on behalf of the enterprise. Article 12 The balance sheet and detailed inventory of assets worked out Article 13 After the liquidation committee has been formed, relevant Article 14 The liquidation committee shall perform the liquidation Members of the liquidation committee shall be devoted to their duties and Article 15 During liquidation, the examination and approval authorities Section 3 Notice and Announcement Article 16 The enterprise shall, within seven days from the starting Article 17 The liquidation committee shall, within 10 days of its The liquidation announcement shall state the name and address of the Article 18 Creditors shall, within 30 days of the receipt of the notice, Article 19 Creditors shall lodge claims within the specified time limit In case a creditor fails to lodge claims within the specified time limit, (1) Claims of known creditors shall be included in the liquidation; and (2) Unknown creditors may lodge claims anytime before the distribution of Section 4 Claims, Debts and Clearing Article 20 The liquidation committee shall make registration of claims Article 21 Creditors who call in question the verification result given During proceedings or arbitration, no assets under disputes may be Article 22 The liquidation committee shall state reasons in writing and Article 23 The following liquidation expenses shall be covered as the (1) expenses needed for the administration, disposal and distribution of (2) costs of announcement, litigation and arbitration; and (3) other expenses needed to pay during the liquidation. Article 24 With respect to secured claims established before the Where the amount of a secured claim exceeds the amount obtained through Article 25 After the prior deduction of liquidation expenses from the (1) wages and labor insurance premiums of the staff and workers; (2) taxes; and (3) other debts. Article 26 No assets of the enterprise may be distributed before Subject to other stipulations by laws, regulations or contracts or Article 27 If the liquidation committee finds during the liquidation Article 28 The following acts committed by the enterprise within 180 (1) voluntarily convey assets of the enterprise; (2) abnormally undersell property of the enterprise; (3) give property security for debts on which there was no property (4) pay off debts that has not become due; and (5) waive claims of the enterprise. From the starting date of the liquidation to the closing of the Section 5 Assessment and Disposition of Assets Subject to Liquidation Article 29 The assessment of assets subject to liquidation shall be (1) Where there are stipulations in the contract or articles of (2) Where no stipulations have been made in the contract or articles of (3) Where no stipulations have been made in the contract or articles of (4) Where the people's court judges or an arbitration organ awards an Article 30 When assets subject to liquidation are sold off, the Section 6 The Closing of Liquidation Article 31 The liquidation committee shall, after finishing the work (1) reasons for liquidation and term and process of the liquidation; (2) the outcome of disposition of claims and debts; and (3) the outcome of disposition of assets subject to liquidation. Article 32 The liquidation report shall, after confirmed by the organ of Article 33 The liquidation committee shall, within 10 days from the date The liquidation committee shall, within 10 days after the formalities Article 34 After closing the liquidation and before going through the (1) In the case of a Chinese-foreign equity joint venture or a Chinese- (2) In the case of a foreign-capital enterprise, the examination and Article 35 The date on which the examination and approval authorities of Article 36 For special liquidation of an enterprise, the examination and Article 37 The liquidation committee shall have a chairman, which shall The liquidation committee shall handle liquidation affairs and is Article 38 The liquidation committee may convene conferences of the Article 39 All creditors are members of the conference of creditors. The chairman of the conference of creditors shall be nominated by the Article 40 The conference of creditors shall be convened by the Article 41 The conference of creditors shall exercise the following (1) Examine supporting materials given by creditors for their claims, and (2) Find out about the situation of the clearing of debts and convey to Article 42 The scheme of liquidation and liquidation report worked out Article 43 Matters which are not covered by this chapter concerning Article 44 If an enterprise develops new business activities during the Article 45 Where an enterprise fails to notify creditors or make Article 46 If a Chinese or foreign investor, in violation of the Article 47 Where a liquidation committee fails to submit the liquidation If the liquidation committee fails to go through the cancellation Article 48 Where an enterprise under liquidation conceals assets, Article 49 If a member of a liquidation committee takes advantage of his Article 50 Those violating provisions of these Measures and committing Article 51 These Measures shall go into effect as of the date of
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Chapter I General Provisions
relevant laws, for the purposes of guaranteeing the smooth conduction of
liquidation of foreign investment enterprises, protecting the legitimate
rights and interests of creditors and investors and maintaining the social
economic order.
equity joint ventures, Chinese-foreign contractual joint ventures and
foreign-capital enterprises established in accordance with the law within the
territory of the People's Republic of China (hereinafter referred to as
enterprises).
handled in accordance with laws and regulations concerning bankruptcy and
liquidation.
liquidation by themselves shall handle things in accordance with provisions
of these Measures regarding ordinary liquidation.
liquidation by itself or the liquidation conducted in accordance with
provisions concerning ordinary liquidation has run into serious obstacles,
the organ of power of the enterprise such as the board of directors or the
joint management committee (hereinafter referred to as the organ of power of
the enterprise), the investors or the creditors may apply to the examination
and approval authorities of the enterprise for a special liquidation. With
the approval of the examination and approval authorities of the enterprise,
the liquidation shall be conducted in accordance with provisions of these
Measures regarding special liquidation.
liquidation shall be conducted in accordance with provisions of these
Measures regarding special liquidation.
with provisions of relevant laws and regulations of the state, on the basis
of the approved contract and articles of association of the enterprise and on
the principle of fairness, reasonableness and protection of enterprises,
investors and creditors.
Chapter II Ordinary Liquidation
expires or the examination and approval authorities of the enterprise
approves the dissolution of the enterprise or the people's court or an
arbitral authority makes a judgment or award to terminate the contract of
the enterprise shall be considered as the starting date of the liquidation.
counting from the starting date of the liquidation to date on which the
liquidation report is submitted to the examination and approval authorities
of the enterprise.
special reasons, the liquidation committee shall, 15 days before the
expiration of the term of liquidation, submit an application for the
extension to the examination and approval authorities of the enterprise. 90
days shall be the limit for extension.
business operations.
establish a liquidation committee for the liquidation of the enterprise. The
liquidation committee shall be established within 15 days from the starting
date of the liquidation.
persons, who shall be selected among members of the organ of power of the
enterprise or engaged from relevant professional personnel by the organ of
power of the enterprise.
by the organ of power of the enterprise. With the approval of the organ of
power of the enterprise, the liquidation committee may engage persons for
handling daily routine.
liquidation, the relevant member of the liquidation committee shall be
replaced:
activities;
liquidation committee be replaced; or
capacity.
the following powers and functions:
a detailed inventory of assets of the enterprise, and formulate a scheme of
liquidation;
creditors in writing;
enterprise;
remaining assets; and
by the liquidation committee, the basis given by the liquidation committee
for valuing and calculating the assets and the scheme of liquidation
formulated by the liquidation committee shall be submitted to the examination
and approval authorities of the enterprise for filing after being confirmed
by the organ of power of the enterprise.
personnel of the enterprise shall, within the time limit prescribed by the
liquidation committee, submit to the liquidation committee the accounting
statements, account books, list of property, list of creditors and debtors
and other liquidation-related information of the enterprise.
obligations in accordance with the law and handle liquidation affairs on the
principle of consultation.
may not accept bribes or seek for illegal income by taking advantage of their
position and power, or embezzle any assets of the enterprise.
of the enterprise and other relevant competent authorities may send
attendants to conferences concerning liquidation of the enterprise, so as to
conduct supervision over the liquidation work of the enterprise.
date of the liquidation, notify in writing the name and address of the
enterprise, the reason for the liquidation and the starting date of the
liquidation to the examination and approval authorities and the department in
charge of the enterprise, the customs, the authorities for foreign exchange
control, the registration authorities, tax authorities and the bank with
which the enterprise has its account, etc., and to the administrative
department for state property if the enterprise holds state property.
establishment, notify in writing the known creditors to lodge claims and,
within 60 days of its establishment, make announcement at least twice in a
newspaper of national circulation and a local provincial or municipal
newspaper. The first announcement shall be made within 10 days of the
establishment of the liquidation committee.
enterprise, the reason for liquidation, the starting date of liquidation, the
address of the liquidation committee, the list of members of the liquidation
committee and the contact person.
or within 90 days of the first announcement if no notice has been received,
lodge claims with the liquidation committee.
and submit documents supporting the amount of claim and other certificates
related to the claim.
the following provisions shall be applied:
the remaining assets of the enterprise is brought to an end; the failure to
do so shall be deemed as abandonment of claims.
lodged by creditors and, after verifying the claims, notify the creditors in
writing of the verification results.
by the liquidation committee on claims may, within 15 days after the receipt
of the written notice, apply to the liquidation committee for
re-verification. Creditors who call in question the result of re-verification
may, within 15 days after the receipt of the written notice regarding the
re-verification result, bring a lawsuit with the people's court in the place
of the domicile of the enterprise; in case of an arbitration agreement
concluded between the enterprise and the creditor, the creditor shall apply
for arbitration in accordance with the law.
distributed by the liquidation committee.
give proof to the organ of power of the enterprise for the inventory profits,
inventory losses, disposal of property, insolvent obligations or non-
recoverable claims, and income or losses incurred during the liquidation
period, and count them into liquidation profits and losses.
first priority with the assets subject to liquidation:
the assets subject to liquidation of the enterprise;
starting date of liquidation, the creditor shall have priority in getting
payment with the collateral.
the disposal of the collateral, the unpaid part of the claim shall be paid
in the order stipulated in Article 25 of these Measures.
assets subject to liquidation, payment shall be made in the following
order:
the liquidation expenses have been covered and the debts of the enterprise
have been paid off.
articles of association of the enterprise, the remaining assets of the
enterprise after paying off the liquidation expenses and all the debts shall
be distributed in proportion to the actual investments by the investors.
that the assets of the enterprise are insufficient to pay off its debts, it
shall apply to the people's court for a declaration of bankruptcy of the
enterprise; the enterprise having been declared bankruptcy in accordance with
the law shall be treated in accordance with laws and regulations concerning
bankruptcy liquidation.
days before the starting date of the liquidation shall be null and void:
security;
liquidation, neither Chinese nor foreign investors may dispose of the
property of the enterprise.
conducted in accordance with the following provisions:
association of the enterprise, such stipulations shall be observed;
association of the enterprise, the decision shall be made through
consultation by the Chinese and foreign investors and submitted to the
examination and approval authorities of the enterprise for approval;
association of the enterprise, nor agreement can be reached through
consultation by the Chinese and foreign investors, the liquidation committee
shall make the determination in accordance with relevant provisions of the
state and with reference to the opinions given by an assets assessing
institute and submit it to the examination and approval authorities of the
enterprise for approval; and
termination of the contract of the enterprise and specifies the measures for
assessing the assets subject to liquidation, such measures shall be applied.
investors of the enterprise shall have priority in making purchase and the
assets shall be sold to whoever makes the highest offers.
defined by the scheme of liquidation, work out a liquidation report, which
shall include the following contents:
power of the enterprise, be submitted to the examination and approval
authorities of the enterprise for filing.
on which the liquidation report is submitted to the examination and approval
authorities of the enterprise, go through the cancellation formalities with
the tax authorities and the customs.
prescribed by the preceding paragraph are completed, go through the
cancellation formalities with, and hand in the business license to the
registration authorities of the enterprise by submitting the liquidation
report together with the cancellation certificates issued by tax authorities
and the customs, and be responsible for making announcement of the
termination of the enterprise on a newspaper of national circulation and a
local provincial or municipal newspaper.
cancellation formalities, the enterprise shall, in accordance with the
following provisions, turn over various accounting vouchers, account books,
accounting statements and so on it keeps:
foreign contractual joint venture, the Chinese investor shall be responsible
for the custody; where there are more than one Chinese investor, the
department in charge of the enterprise shall designate one of them to take
charge of the custody; or
approval authorities of the enterprise shall designate a unit to take charge
of the custody.
Chapter III Special Liquidation
the enterprise approves the special liquidation or the date on which the
enterprise is ordered to close down shall be considered as the starting date
of the liquidation.
approval authorities of the enterprise or a department entrusted thereby
shall organize Chinese and foreign investors, representatives from relevant
departments and relevant professional personnel to form a liquidation
committee.
be nominated by the examination and approval authorities of the enterprise or
the department entrusted thereby. During the special liquidation, the
chairman of the liquidation committee shall exercise the functions and powers
of the legal representative of the enterprise, and the liquidation committee
shall exercise the functions and powers of the organ of power of the
enterprise.
accountable to the examination and approval authorities of the enterprise.
organ of power of the enterprise and conferences of creditors to discuss
specific matters related to liquidation.
Members of the conference of creditors shall have voting power, but creditors
who have claims secured by property and have not waived the priority in
getting repayment shall not.
examination and approval authorities of the enterprise or the department
entrusted thereby from among the creditors having voting power.
liquidation committee. The liquidation committee shall, within 15 days before
the conference, notify creditors in writing. A creditor who cannot attend the
conference of creditors shall entrust another person by written authorization
as his agent to attend the conference.
functions and powers:
the amount and guarantee situation of claims; and
the liquidation committee the opinions of creditors with respect to the
scheme of liquidation and the situation of the clearing of debts.
by the liquidation committee must be confirmed by the examination and
approval authorities of the enterprise.
special liquidation shall be handled by applying provisions of Chapter II of
these Measures.
Chapter IV Legal Liabilities
period of liquidation, the registration authorities of the enterprise shall
order the enterprise to make corrections and may impose a fine between 10,000
and 100,000 yuan.
announcement in accordance with the provisions of Article 17 of these
Measures, the registration authorities of the enterprise shall order the
enterprise to make corrections and may impose a fine between 10,000 and
100,000 yuan.
provisions of Paragraph 2, Article 28 of these Measures, dispose of the
property of the enterprise in the period of liquidation, the examination and
approval authorities of the enterprise shall order a restoration to the
original state or order the investor to return the disposed property to the
enterprise; where any damage is caused, the investor shall bear the
compensation responsibility.
report for filing to the examination and approval authorities of the
enterprise or fails to submit the liquidation report to the registration
authorities of the enterprise in accordance with the provisions of Article 32
or 33 of these Measures, or conceals important facts or omits major matters
when submitting the liquidation report, the examination and approval
authorities and the registration authorities of the enterprise shall order
the liquidation committee to make corrections.
formalities for the enterprise in accordance with the provisions of
Article 33 of these Measures, the registration authorities of the enterprise
shall revoke its business license and make announcement.
makes false balance sheet or false inventory of assets or distributes the
assets of the enterprise before the payment of liquidation expenses and the
debts of the enterprise, the examination and approval authorities and the
registration authorities of the enterprise shall order the enterprise to make
corrections and the registration authorities of the enterprise shall impose a
fine between one and five percent of the amount of assets concealed or the
amount of the assets distributed before all debts of the enterprise are paid
off; the person in charge directly responsible and other person directly
responsible shall be imposed a fine between 10,000 and 100,000 yuan.
position and power to play favoritism and commit irregularities, seek for
illegal earnings or embezzle the assets of the enterprise, the examination
approval authorities and the registration authorities of the enterprise shall
order the person to return the embezzled assets and the registration
authorities of the enterprise shall confiscate the illegal earnings and may
impose a fine between one and five times the illegal earnings.
a crime shall be investigated for criminal responsibility.
Chapter V Supplementary Provisions
promulgation.
URL: http://www.asianlii.org/cn/legis/cen/laws/mflofie603