9 Aug 2019
China Reforms Liquidation and Bankruptcy Legislation
Moves to improve the liquidation and deregistration system as it applies to insolvent businesses, while clearly specifying the conditions under which liquidation procedures can be initiated, have been introduced by the National Development and Reform Commission, alongside a number of other government departments. The proposals were outlined in the recently-issued Reform Plan for Accelerating the Improvement of the Exit System for Market Players (Fa Gai Cai Jin No. 1104 ), which also sets out a prescribed time limit for liquidation and clarifies the rights and obligations of the various parties involved in accordance with the nature of the business entity in question.
The Reform Plan also sets out to improve and amend current bankruptcy legislation, including the procedures relating to the initiation and execution of bankruptcy proceedings, while also clarifying the rights and obligations of the government, courts, debtors, creditors and bankruptcy administrators in any such proceedings. The Reform Plan also indicates that steps will be taken to establish procedures relating to the bankruptcy of individuals, with the emphasis on the resolution of the joint and several liabilities of said individuals.
Source: State Council of China