CHAPTER EIGHT BANKRUPTCY, DISSOLUTION AND LIQUIDATION

　　Article 189 When a company is declared bankruptcy according to law due to insolvent of debt payment, the people's court shall organize a liquidation group composed of shareholders, relevant departments and specialized personnel according to the provisions of relevant laws and conduct liquidation of the company.

　　Article 190 A company may dissolve in one of the following cases:

　　1. The term of operation prescribed in the articles of association has expired or other conditions for dissolution as provided for in the articles of association have appeared;

　　2. A resolution on dissolution has been adopted by meeting of shareholders;

　　3. Dissolution is necessary for merger or division of the company.

　　Article 191 When a company is decided to be dissolved according to the items 1 and 2 of the preceding article, a liquidation group shall be formed within 15 days of the decision. The liquidation group for the liquidation of a limited liability company shall be formed by shareholders and the members of the liquidation group for the liquidation of a joint stock company limited shall be determined by the meeting of shareholder. If a liquidation group is not formed within the prescribed time limit, creditors may request the people's court to designate relevant personnel to form a liquidation group to carry out liquidation. The people's court shall accept such request and timely designated members of the liquidation group to conduct liquidation.

　　Article 192 A company shall be dissolved if it has been ordered to close down for violating the law or administrative decrees and a liquidation group shall be formed by the department in charge.

　　Article 193 The liquidation group shall exercise the following powers during the period of liquidation:

　　1. To carry out clearance of the assets of the company and compile the balance sheet and list of assets.

　　2. To notify creditors or make a public announcement about liquidation;

　　3. To handle the remaining businesses of the company;

　　4. To pay taxes overdue;

　　5. To clear credits and debts;

　　6. To dispose the remaining assets after all the debts are paid off;

　　7. To participate in civil proceedings on behalf of the company.

　　Article 194 The liquidation group shall, within ten days after its establishment, notify the creditors and make a public announcement in newspapers at least three times within 60 days. Creditors shall declare their credits with the liquidation group within 30 days after the notifications received or within 90 days starting from the date of the first announcement in cases in which notifications have not been received.

　　In declaring credits, creditors shall specify the relevant matters about the credits and provide verifications. The liquidation group shall registered the credits.

　　Article 195 After clearing the assets and compiling the balance sheet and list of assets, the liquidation group shall formulate a liquidation plan and submit it to the meeting of shareholders or department in charge for confirmation.

　　If the assets of the company are sufficient for payment of debts, the assets may be used to pay the liquidation fee, the wages and labor insurance fees of workers, taxes overdue and clear debts.

　　The remaining assets after liquidation according to the preceding paragraph can be distributed to shareholders according to their proportion of investment in the case of a limited liability company and according to the proportion of shares held by the shareholders in the case of a joint stock company limited.

　　During the period of liquidation, the company shall not engage in new operating activities. The assets of the company may not be distributed to shareholders the assets before payments be made in accordance with provisions in second paragraph of this article. Article 196 If after clearance of the assets and compilation of the balance sheet and list of assets of a company to be liquidated due to dissolution or liquidation, the assets of the company are found to be insufficient for the debt payments, the liquidation group shall immediately apply for declaration of bankruptcy of the company with the people's court.

　　If the company has been declared bankruptcy by the people's court, the liquidation group shall hand over the liquidation affairs to the people's court.

　　Article 197 After the liquidation, the liquidation group shall compile a liquidation report and submit it to the meeting of shareholders or department in charge for confirmation and to the registration department for canceling registration of the company and make a public announcement about the termination of operation of the company. If the cancellation of the business license of the company has not been applied, the company registration department shall revoke its business license and make a public announcement on the matter.

　　Article 198 Members of a liquidation group shall be faithful to their office and perform their duties according to law.

　　Members of a liquidation group may not abuse their powers to accept bribes or other illegal income or convert property of the company into their own.

　　Members of a liquidation group shall be liable to compensation for the losses caused to the liquidated company or creditor due to their deliberate acts or serious faults.