Bankruptcy in China
Bankruptcy in China

What Happens to a Chinese Enterprise’s Shareholders if It Goes Bankruptcy?

When a Chinese enterprise is adjudged bankrupt, it generally means that its assets are insufficient to pay off all its debts, so its shareholders cannot recover their capital contributions through bankruptcy procedures.

Title Retention and Lien: Two Protection Measures for Debt Settlement in China

If your debtor defaults on a debt, you can take a lien on the debtor’s chattels (movable property) that you have legal possession of. In other words, the seller can retain ownership of the goods if the buyer fails to pay the price or perform other obligations as scheduled.

What Happens to You if Your Chinese Debtor Goes Bankruptcy?

Your Chinese debtor can no longer pay off its debts to you alone. You shall be paid together with all of its creditors. You also need to declare your creditor rights to its bankruptcy administrator.

How Do Chinese Courts Examine Bankruptcy Applications?

The examination procedure of the court for accepting bankruptcy cases can be summarized into four stages: applying for bankruptcy, conducting formal examination, accepting the application and accepting the bankruptcy case.

What Are the Requirements for Bankruptcy in China?

A Chinese enterprise may go bankrupt if both of the following conditions are met: first, it fails to pay its debts as they fall due; and second, its assets are inadequate to pay off all debts or it is clearly insolvent.

What Happens to My Debts When a Chinese Company Is Dissolved or Goes Bankrupt?

You can claim debt recovery from its shareholders. Normally, due to the very nature of companies (legal persons), it is very difficult for you to claim debt recovery from a Chinese company’s shareholders. Once the company is canceled, however, you will have opportunities to do so.