Foreword

During the spread of the novel coronavirus, many companies will not survive the economic winter, and it may be a helpless but wise choice to withdraw from the market.With the continuous improvement of China's credit investigation system, just to shut down business without liquidation will bring endless troubles to enterprises and investors.

Compared with compulsory bankruptcy liquidation, enterprises should consider independent liquidation to gain the initiative to exit the market and minimize the follow-up responsibility of investors.With more than ten years of experience in corporate bankruptcy and liquidation, Shanghai Nuo Di Law Firm brings you the legal questions and answers related to independent liquidation.

Question 1: What is independent liquidation?

Answer: Independent liquidation is a form of liquidation according to law. In accordance with the provisions of the law and judicial interpretation, a legal person or an organization without legal personality shall, according to its own needs and after dissolution according to law, set up a liquidation team on its own to conduct the company's assets audit, assets liquidation, final write-off and withdrawal from the market in accordance with the liquidation procedures prescribed by law.

Nuo Di’s comment: The main difference between independent liquidation and compulsory liquidation and bankruptcy liquidation is that the former does not involve the intervention of judicial organs, so investors can take more initiatives in the liquidation process to protect their legitimate rights and interests.

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Question 2: Can the enterprise cancel directly without liquidation?What are the legal consequences?

Answer: No. After the enterprise dissolves in accordance with the law, the subject of liquidation liability shall carry out liquidation in accordance with the law, and then cancel the enterprise. If the subject of liquidation fails to perform the liquidation responsibility, which result in that the enterprise cannot carry out liquidation in accordance with the law, it is the absence of liquidation responsibility, or the absence of the responsibility of the liquidation subject.Among them, the limited company is the typical representative of the market subject, and the legal consequence of the lack of shareholders' liquidation responsibility is the complete embodiment of the legal consequence of the lack of corporate liquidation responsibility.

Nuo Di’s comment: Here are some of the most significant legal consequences.

1. Enterprises are listed in the list of abnormal operations and their business licenses are revoked.

    

   When an enterprise is unable to operate normally for a long period of time and the enterprise has not gone into liquidation after it has been ordered by a government department to close down, withdraw or disband by a court decision, or closed down, etc., these enterprises that have not operated for more than two years will be transferred to the list of operating anomalies and have their business licenses revoked in accordance with market management laws and regulations according to the requirements of the Notice of the State Administration of Taxation and the State Administration for Industry and Commerce on the Clearing Enterprises with long-term suspension of business Doc. No. [2016] 97.

    

   These enterprises that have not been operated for more than two years will, in fact, also have a common result, which is because of the long-term failure to operate, all operational and financial data are incomplete or completely lost, forming a serious legal consequence that actually cannot be liquidated.

    

    

2. Limited liability becomes unlimited, and shareholders shall bear joint and several liability for the debts of the company.

    

   Shareholders of a limited company have legal control over the company's finance. If the company should be liquidated according to law and there is no liquidation, the lack of shareholders' liquidation responsibility will directly lead to the company's property losing control.The creditor loses the opportunity to repay the claim in the company's property.According to the principle of civil liability fault, shareholders' claims to the creditors of the company shall compensate for the losses caused to the creditors of the company due to shareholders' failure to perform their legal duties, which is the legal root of shareholders' unlimited liability for compensation.

    

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