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Regulations
of Shenzhen Special Economic Zone on Liquidation of Enterprises
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Chapter
I General Provisions
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Article
1 In order to standardize the acts of liquidation of
enterprises, protect lawful rights
and interests of creditors,
investors and other interested persons, and maintain the
order of the market economy of Shenzhen Special Economic Zone
(hereinafter referred to as "Special
Zone" ),
these regulations are hereby formulated.
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Article
2 These regulations shall be applicable to any enterprise legal
person who has been registered
in the Special Zone or whose
domicile is located in the Special Zone.
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Article
3 The liquidation of enterprise shall abide by the principles of
open and justice.
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Article
4 Any enterprise shall be liquidated according to these
regulations in anyone of the following
circumstances:
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(1)
the operating period being expired or other circumstances for
termination coming out according
to the articles of association;
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(2)
investors deciding to be dissolved;
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(3)
being dissolved due to merge or split;
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(4)
being deregistered according to law or ordered to closedown; and
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(5)
failing to operate without reasonable ground for 6 months upon
the date being established or
suspending of business voluntarily
after operation for more than 6 continuous months.
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These
regulations shall not be applicable in the case of bankruptcy
liquidation.
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Article
5 The Industrial and Commercial Administrative Authority of
Shenzhen Municipal People' s
Government (hereinafter referred to as the "Liquidation
Authority" )
is the authority in charge of liquidation of enterprises, it
shall perform the supervision and
administration over the
liquidation of enterprises.
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Chapter
II The Commencement of Liquidation
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Article
6 The date of liquidation of enterprise shall be:
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(1)
the expiration date of business;
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(2)
the date that the investors making the decision on dissolution;
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(3)
the date of dissolution due to merge or dissolution;
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(4)
the date being deregistered or ordered to closedown; and
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(5)
the date that the Liquidation Authority announcing to liquidate.
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Article
7 An enterprise shall make a written notice to the registration
authority, tax authority,
labor authority and deposit bank
within 7 days from the date of commencement of the liquidation.
In case there are state-owned assets involving in the
liquidation, the enterprise shall make a written notice
to the
state-owned asset management authority.
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Article
8 An enterprise shall file written materials relevant to the
liquidation to the Liquidation
Authority within 15 days from the
date of commencement of the liquidation.
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Article
9 An enterprise shall suspend any act irrelevant to the
liquidation from the date of commencement
of the liquidation.
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Article
10 From the date of commencement of liquidation to the date of
closing liquidation is the
period of liquidation, which shall
not exceed 180 days; in case such period need deferring due to
special situation, such deferral shall be approved in advance by
the Liquidation Authority. However the period
of liquidation
shall not exceed 360 days at the longest.
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In
case the liquidation is suspended during the process of
liquidation due to litigation or other
reasons, the period of
suspension of liquidation may not be included in the period of
liquidation.
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Chapter
III Liquidating Group
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Article
11 A liquidating group, which shall be composed of no less than
3 members, shall be set
up within 15 days from the date of
commencement of liquidation.
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Article
12 Any liquidation of enterprise due to termination as
stipulated by Item (1), (2) and (3)
of Article 4 of these
regulations shall be carried out by a liquidation group set up
by the enterprise,
while any liquidation due to the
circumstances as stipulated by Item (4) and (5) of the same
article
shall be carried out by the Liquidation Authority.
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In
the case that any liquidation carried out by a liquidation group
set up by an enterprise, such
liquidation may also be carried
out by the Liquidation Authority after application of the
enterprise.
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Article
13 Where an enterprise organizes a liquidation group, the group
shall be organized by the
directors or shareholders of a joint
stock limited company or a limited company, or by other
investors
in the case of other enterprises. An enterprise may
appoint members of a liquidation group among the Chinese
certified public accountants, certified lawyers or other
professionals who know well liquidation affairs.
In the case of
liquidation of an enterprise which has state-owned assets, the
members of the liquidation
group shall include some
representatives of the state-owned assets administrative
authority.
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The
list of members of a liquidation group, which organized by the
enterprise, shall be submitted
to the Liquidation Authority for
recording after being determined.
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Article
14 Where the Liquidation Authority organizes a liquidation
group, the group shall be composed
of investors, relevant
authorities, Chinese certified public accountants, certified
lawyers or
other professionals who know well liquidation
affairs.
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A
liquidation group, which organized by the Liquidation Authority,
shall be responsible for and
make working report to the
Authority.
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Article
15 An enterprise or the Liquidation Authority may replace the
members of the liquidation
group in one of the following
circumstances when those members:
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(1)
commit illegal acts during the liquidation;
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(2)
are demanded to be replaced by creditors and investors
with warrant; and
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(3)
shall be replaced due to other legal reasons.
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Article
16 A liquidation group represents a liquidated enterprise during
the period of liquidation.
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Article
17 The powers of a liquidation group include:
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(1)
informing the known creditors in written and informing
the unknown ones by a bulletin;
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(2)
liquidating assets, credit and debt of an enterprise,
making balance sheet and assets lists;
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(3)
disposing an enterprise and liquidating relevant
incomplete business;
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(4)
taking back credit of an enterprise and replevying
unsubscribed due capital;
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(5)
paying wages and social insurance fees for the employees,
paying due tax;
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(6)
paying off debts of an enterprise;
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(7)
disposing residual assets of an enterprise after paying
off debts;
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(8)
acting on behalf of an enterprise to intervene action and
arbitration; and
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(9)
handling other liquidation matters.
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Any
acts of a liquidation group relevant to exert its powers, the
consent of over half of all the
members of the liquidation group
shall be secured.
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Article
18 Any member of a liquidating group shall devote
to its duty so as to performance liquidating obligation
according to the law.
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Any
member of a liquidating group shall not take bribes or gain
other illegal incomes, embezzle
or devour assets of a liquidated
enterprise.
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Article
19 Reward for members of a liquidation group, which set up by an
enterprise, shall be decided
by the investors; while it shall be
decided by the Liquidation Authority who set up the liquidation
group.
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Chapter
IV Declaration and Examination of Creditor' s
Rights
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Article
20 Upon its establishment, a liquidation group shall inform the
known creditors in writing
within 10 days and publish an
announcement for at lest 3 times within 60 days. The creditors,
who
have received notices, shall declare their creditor' s
rights with the liquidation group within 30 days upon the date
receiving the notices, while the
other creditors shall declare
their creditor' s
rights within 90 days upon the date the announcement being
published for the first time.
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Where
the Liquidation Authority organizes the liquidation, in case the
assets or the amount of debts
are less than RMB 500,000 and the
debts are clearly specified and the facts are clear, the
creditors
shall declare their creditor' s
rights with the liquidation group within 15 days upon receiving
the written notices; other creditors
shall declare their
creditor' s
rights within 30 days upon the date the announcement being
published for the first time.
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In
case any creditors fail to declare their creditor' s
rights within the time limit specified in the announcement and
fail to bring a litigation within
time limit specified by law,
such cases shall be regarded as automatically giving up the
aforesaid
rights. Except otherwise the overdue declaration is
not attributed to the liability of the creditors and they handle
the declaration before the assets of liquidation being
distributed.
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Article
21 The contents of a written notice and an announcement of
liquidation shall include the
name and address of the
enterprise, the reasons for liquidation, the commencement date
of liquidation,
the time limit for declaration of creditor' s
rights, the composition of the liquidation group, the address
for communication and other essential
matters.
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Article
22 A creditor shall specify the character and amount of the
creditor' s
rights and the time they incurred and provide relevant evidence
at the time of declaration of
creditor' s
rights.
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The
guarantor, after subrogating the debts of the enterprise, shall
have the right to declare creditor' s
rights. The amount of the creditor' s
rights shall be the amount of subrogation of compensation.
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Where
a liquidation group decides to cancel an unperformed contract of
a liquidated enterprise,
in which results detriment to another
party of the contract, the other party shall have right to
declare creditor' s
rights based on the amount of damages caused.
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Article
23 The followings shall not be regarded as credit to be
declared:
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(1)
credit which overruns limitation of actions; and
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(2)
expenditure occurred in the processing of liquidation by
the creditors.
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Article
24 A liquidation group shall examine the evidence for relevant
creditor' s
right declared by the creditor and affirm whether there being a
guarantee and the amount of the
guarantee on the creditor' s
right.
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Article
25 The result of liquidation on the creditor' s
rights, which is liquidated by a liquidation group, shall be
notified to the creditors in writing.
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In
case any creditors object the liquidated creditor' s
rights, they may, within 15 days upon receiving the written
notice, bring a lawsuit to the people' s
court or apply for arbitration to an arbitral body in case there
being arbitral clause or an arbitral
agreement between the
creditors and the enterprise.
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Article
26 A liquidation group shall not repay compensation to any
creditor within the period of
declaration of creditor' s
rights, except otherwise being approved by the Liquidation
Authority.
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Chapter
V Liquidation of Assets
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Article
27 After the commencement of the liquidation, the legal
representative and relevant person
in charge shall hand over all
the accounting books, documents, files and materials, reply the
inquiries
relevant to assets and operations of the liquidation
group and assist the liquidation group to carry out the
liquidation.
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Article
28 The assets of liquidation shall include:
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(1)
the assets owned or managed by the enterprise at the
commencement of liquidation;
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(2)
the assets acquired by the enterprise during the period
that after the commencement of liquidation but before the
end of
the liquidation; and
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(3)
other property rights ought to be exercised by the
enterprise.
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The
assets used to provide a guarantee shall be excluded from the
assets of liquidation, but if
the value of those assets exceeds
the amount of the guaranteed debt, the residual part shall
belong
to the assets of liquidation.
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Article
29 The creditor' s
rights of the liquidation group in the enterprise shall be duly
recovered. A lawsuit may be brought
or an arbitration may be
applied in case there is any dispute with the recover.
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Where
the debtor goes bankrupt of is liquidated, the liquidation group
shall declare the creditor' s
rights as an enterprise.
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For
those unrecoverable creditor' s
rights, the liquidation group shall show the reasons therein to
the investors and bring forward
a scheme of disposal.
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Article
30 Where an investor has not contributed his payable capital
even at the commencement of
liquidation, the liquidation group
may set a time limit for the payment.
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Article
31 A liquidation group shall not sell off the assets of
liquidation before the end of investigation
of creditor' s
rights, except otherwise the delay of selling off those assets
will lead to gross loss to the
assets of liquidation.
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Before
the end of the investigation of creditor' s
rights, in case it is critically necessary to sell off the
assets of liquidation of an enterprise
which has state-owned
assets, such sale shall be submitted to the state-owned assets
administrative
authority for approval.
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Article
32 The assets in a liquidated enterprise, in case they belong to
others, shall be take back
by their owner through the
liquidation group.
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Article
33 After the completeness of liquidation of assets of an
enterprise, the liquidation group
shall work out the balance
sheets and the list of assets. In case the liquidation organized
by
the enterprise, the balance sheets and the list of assets
shall be submitted to the shareholders' meeting
or the investors for affirmation, while they shall be submitted
to the Liquidation Authority
for affirmation in case the
liquidation organized by the Liquidation Authority.
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Article
34 The liquidation group, after liquidating the assets of the
enterprise and working out
the balance sheets and the list of
assets and therein finding out that the assets of the enterprise
being insufficient for repaying debts, shall promptly apply to
the people' s
court for declaration of bankruptcy.
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After
the enterprise being ruled to go bankruptcy, the liquidation
group shall hand over the liquidation
affairs to the people' s
court.
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Chapter
VI Distribution of Assets and Ending of Liquidation
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Article
35 After the completeness of liquidation of assets of an
enterprise, the liquidation group
shall work out a liquidating
scheme. In case the liquidation organized by the enterprise, the
liquidating
scheme shall be submitted to the shareholders' meeting
or the investors for affirmation, while in the case that the
liquidation organized by the
Liquidation Authority, the
liquidating scheme shall be submitted to the Liquidation
Authority for
affirmation.
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Article
36 The following liquidating expenditures shall be paid in
priority by the assets of liquidation:
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(1)
the rewards for the members of the liquidation group and
the cost for appointing of workers;
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(2)
the costs of managing, selling off and distributing of
the assets of liquidation;
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(3)
the fees of litigation, arbitration and announcements;
and
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(4)
other costs, which being for the lawful rights interests
of the creditors and the investors.
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Article
37 The guaranteed creditor' s
rights shall be compensated in priority within the limitation of
the value of the guaranty. The
part uncompensated shall be
regarded as the creditor' rights
that without a guarantee.
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Article
38 After repaying the liquidating costs, the assets of
liquidation shall be used to clear
off debts according to the
following order:
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(1)
the wages and social insurance fees of the employees;
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(2)
the taxes; and
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(3)
the debts of the enterprise.
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The
undue debts shall be regarded as the due ones, but the undue
interests shall be subtracted.
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Article
39 After clearing off the debts according to the order specified
by the aforesaid article,
the residual assets shall be
distributed to the investors according to proportion of
investment
or the article of the enterprise. If there is an
additional agreement between the investors, the agreement shall
prevail.
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Article
40 In case there is any dispute to the creditor' s
rights or a litigation in which results the creditors and the
investors being temporary unable
to join the distribution, an
equivalent amount of assets shall be drawn from the assets of
bankruptcy
at the time of distribution.
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Article
41 After the completeness of the liquidation, the liquidation
group shall work out a liquidation
report, a report form of
income and expenses during the liquidation and other financial
accounting
books, which shall be submitted to the shareholders' meeting
or the investors for affirmation in case the liquidation is
organized by the enterprise,
or the Liquidation Authority in
case the liquidation is organized by the Liquidation Authority.
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The
liability of the liquidation group shall be regarded as being
unchained after the liquidation
report being affirmed, except
otherwise the liquidation group commits illegal acts.
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Article
42 Within ten days upon the liquidation report being affirmed, a
liquidation group shall
submit the aforesaid liquidation report
and statistical forms for record to the Liquidation Authority
and cancel the registration with the Registration Authority.
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Article
43 An enterprise shall be announced to terminated by the
liquidation group after the cancellation
of registration being
approved by the Registration Authority.
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Article
44 After the cancellation of registration, the account book
relevant to such essential document
as the business and
liquidation of an enterprise shall be preserved by an investor
appointed by
the Liquidation Authority.
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Article
45 The settlement of employees of an enterprise shall be handled
according to relevant laws
and regulations of the state and the
Special Zone.
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Chapter
VII Legal Liabilities
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Article
46 An enterprise, which ought to but fails to be liquidated
according to Item (1), (2) or
(3) of Article 4 of these
regulations, it shall be ordered to carry out liquidation within
time
limit; in case the enterprise refuses to liquidate within
the specified time limit, the Liquidation Authority shall
organize the liquidation and impose a fine of no less than RMB
10,000 but no more than RMB 20,000
on the enterprise.
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Article
47 An enterprise or an liquidation group, which fails to submit
relevant materials to the
Liquidation Authority according to
these regulations, shall be ordered to make rectification by the
Liquidation Authority.
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Article
48 In case an enterprise fails to establish an liquidation
group, or although establishes
one, but the composition of which
does not comply with the provisions of these regulations, the
enterprise shall be ordered to make rectification by the
Liquidation Authority; in case it refuses to make rectification,
the liquidation shall be carried by a liquidation group
organized by the Liquidation Authority.
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Article
49 Where an enterprise does not inform or publish an
announcement to the creditors according
to these regulations, it
shall be ordered to make rectification by the Liquidation
Authority by
setting a time limit for informing and publishing
an announcement and imposed a fine of no less than RMB 20,000
but no more than RMB 100,000.
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Article
50 Where an enterprise conceals properties, makes illusory
record on its balance sheets
or assets lists, or distributes its
assets before discharging its debts, it shall be ordered to make
rectification by the Liquidation Authority and imposed a fine of
no less than 1 percent but no more than 5
percent of the amount
of the distributed assets, meanwhile the person in charge and
other personnel
directly responsible shall be imposed a fine of
no less than RMB 50,0000 but no more than RMB 100,000 and be
prosecuted for criminal liability in case it constitutes a
crime.
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Article
51 Where an enterprise does not comply with legal procedure to
distribute its assets during
the liquidation, it shall be
ordered to make rectification by the Liquidation Authority,
meanwhile
the person in charge shall be imposed a fine of no
less than RMB 10,000 but no more than RMB 20,000.
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Article
52 Where the legal representative or relevant person violates
the provisions of these regulations
by making false reply,
explanation, statement or refusing to hand over relevant
accounting books,
documents, files and materials, he shall be
imposed a fine of no more than RMB 10,000 but no less than RMB
20,000; and shall be prosecuted for criminal liability in case
it constitutes a crime.
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Article
53 Where the legal representative or relevant person in charge
deserts without being authorized
by the liquidation group or the
Liquidation Authority, he shall be imposed a fine of no less
than
RMB 5,000 but no more than RMB 10,000.
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Article
54 Where the members of a liquidation group commit the acts of
irregularities for favoritism,
seek illegal gains or embezzle
properties of the enterprise, they shall be ordered to hand back
the aforesaid properties, confiscated of illegal gains and
concurrently imposed a fine of more than 1 time but
less than 5
times of the illegal gains; and shall be prosecuted for criminal
liability in case
it constitutes a crime.
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Article
55 Where the members of the liquidation group cause damages to
the enterprise or the creditors
due to aforethought or gross
negligence, they shall be responsible for compensation.
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Article
56 Where the Liquidation Authority violates the provisions of
these regulations by misusing
of authority, which results in
detriment to the investors, creditors or other interested
persons,
it shall be responsible for compensation. While
relevant persons responsible shall be imposed administrative
responsibility and prosecuted for criminal liability in case it
constitutes a crime.
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Chapter
VIII Supplementary Provisions
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Article
57 The rules for liquidation of enterprise other than legal
person shall be formulated separately.
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Article
58 The Shenzhen Municipal People' s
Government may formulate implementing rules according to these
regulations.
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Article
59 These regulations shall take effect as of October 1, 1995. In
the case that liquidation
of an enterprise has commenced before
the enforcement of these regulations, provisions of relevant
laws and regulations of that time shall be applicable to such
liquidation.
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(Translated by Ruixin Lin) |
