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Q：
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What are the legal reasons for a company to terminate its operation?
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A：
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Enterprises may be dissolved voluntarily, forcibly, declared bankrupt, or due to other legal reasons.
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Q：
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What are the circumstances of voluntary dissolution?
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It refers to the dissolution based on the wishes of the company's shareholders' meeting or general meeting, non-corporate legal person investors (competent authorities), partners of partnership enterprise, sole proprietorship investors, members' meeting or representative meetings of farmers' professional cooperatives (cooperatives union), private business owners, or branch affiliated enterprises (units).
For examples: The circumstances of company dissolution include: the term stipulated in its articles of association expires, or any other cause for dissolution as is stipulated in the articles of association exists; The shareholders' meeting or general meetings of shareholders makes a resolution to dissolve the company; The company is dissolved because of a merger or division. The dissolution of a partnership enterprise includes: all partners decide to dissolve; The dissolution reasons stipulated in the partnership agreement occur; When the partnership term expires, the partners decide not to operate anymore. The dissolution of a sole proprietorship includes: the investor decides to dissolve, etc. The dissolution of farmers' professional cooperatives (cooperatives union) includes: dissolution by resolution of the members' meeting; The occurrence of dissolution reasons as stipulated in the articles of association.
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Q：
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What are the circumstances of forced dissolution?
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It is usually divided into dissolution on administrative decision and dissolution on people's court judgment. Administrative decision to dissolve, including the legal person’s business license or registration certificate is legally withdrawn, or the legal person has received an order of closure or been dissolved. If the people's court sentences to dissolve, according to the provisions of the Company Law, due to serious difficulties in the operation and management of the company, continuing to exist will cause significant losses to the interests of shareholders, and cannot be resolved through other means, all shareholders who holding more than 10% of the voting rights of the company may request the people's court to dissolve the company.
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How should the dissolution of a legal entity be handled when conducting liquidation in accordance with the law before the cancellation of an enterprise?
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According to the Civil Code, where a legal person is dissolved for reasons other than a merger or division, a liquidation committee shall be formed in a timely manner by the persons with the duty of liquidation to liquidate the legal person.
The procedure for liquidating a legal person shall be in compliance with the provisions of relevant laws; in the absence of such a provision, the relevant rules provided in corporate laws shall be applied mutatis mutandis.
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What organization is the liquidation committee?
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The company shall establish a liquidation committee within 15 days from the date of the occurrence of dissolution reasons, responsible for liquidating the company's assets and bond debts.
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