Article 181 A company may be dissolved for any one of the following reasons:
(1) the term of operation prescribed by the company's articles of association has expired, or any other cause for dissolution prescribed by the company's articles of association has occurred;
(2) the shareholders meeting or the general meeting of shareholders has adopted a resolution for dissolution;
(3) dissolution is required due to merger or division of the company;
(4) the business license of the company is revoked by law, or the company is ordered to terminate or cancelled;
(5) the company is dissolved by the people’s court in accordance with the provisions of Article 183.
Article 182
Where a company is involved in the circumstance described in the above Article 181 (1), the company may amend its articles of association to continue its existence. The amendment to the articles of association shall be adopted by two thirds or more of all voting shareholders in the case of a limited liability company. In the event of a joint stock limited company, the amendment requires affirmative votes by at least two-thirds of the votes held by shareholders attending the general meeting of shareholders.
Article 183
Where there are serious difficulties in the operation of a company and the company’s continuance will definitely cause significant losses to shareholders’ interests, however, such scenario cannot be solved through other channels, then, shareholders representing 10% of all the votes may request the people’s court to dissolve the company.
Article 184
Where a company is to be dissolved pursuant to Article 181 (1), (2), (3), (4) and (5), a liquidation committee shall be formed within fifteen days; the liquidation committee of a limited liability company shall be composed of its shareholders, and members of the liquidation committee of a joint stock limited company shall be determined by the board of directors or the general meeting of shareholders; where the company fails to form a liquidation committee to carry out liquidation within the prescribed time limit, its creditors may petition the people's court to appoint the relevant persons to form a liquidation committee to carry out liquidation. The people's court shall accept such petition, and promptly appoint members of the liquidation committee to carry out liquidation.
Article 185
The liquidation committee shall exercise the following authorities in the course of liquidation:
(1) identifying the company's assets, and preparing a balance sheet and a schedule of assets respectively;
(2) notifying creditors through notice or public announcement;
(3) handling the company's ongoing businesses which are related to liquidation;
(4) making full payment of taxes owed and the taxes incurred during liquidation;
(5) identifying the company's creditor's rights and debtor's liabilities;
(6) disposing of the remaining assets after full payment of company debts;
(7) participating in civil actions on behalf of the company.
Article 186
The liquidation committee shall notify creditors within ten days of its establishment, and shall make a public announcement in a newspaper within sixty days. Creditors shall file their creditor's rights with the liquidation committee within thirty days of receipt of the notice, and within forty-five days of publication of the first notice if such creditors did not receive the notice.
In filing for creditor's rights, the creditors shall state the relevant matters relating to the creditor's rights, and provide supporting materials. The liquidation committee shall record such creditor's rights. During the filing for creditor’s rights, the liquidation committee shall not pay any debts to creditors.
Article 187
After identifying the company's assets and preparing the balance sheet and schedule of assets, the liquidation committee shall prepare a liquidating plan, which shall be submitted to the shareholders meeting, the general meeting of shareholders or the people’s court for ratification.
After payment of liquidating expenses, payment of wages and expenses for labor insurance of the workers, payment of taxes owed, and payment of company debts are made, the remaining assets shall be distributed to the shareholders in proportion to their shares of capital contribution in the case of a limited liability company, and in proportion to their share holdings in the case of a joint stock limited company. In the course of liquidation, the company continues its existence but shall not conduct any business activities irrelevant to the liquidation. Before payments have been made in accordance with the preceding regulations, the assets of the company shall not be distributed to the shareholders.
Article 188
Where the liquidation committee, after identification of company assets and preparation of the balance sheet and schedule of assets, discovers that the company does not have sufficient assets to fully repay company debts, the liquidation committee shall file a bankruptcy application with the people's court in accordance with the law.
Once the company is adjudged bankrupt by a ruling of the people's court, the liquidation committee shall transfer the liquidating affairs to the people's court.
Article 189
Upon completion of a company's liquidation, the liquidation committee shall prepare a liquidating report, which shall be submitted to the shareholders meeting, the general meeting of shareholders or the people’s court for ratification, and upon ratification, the liquidation committee shall submit such report to the company registration authority to apply for company de-registration, and make a public announcement of the company's termination.
Article 190
Members of the liquidation committee shall faithfully perform their duties and carry out their liquidating obligations in accordance with the law.
Members of the liquidation committee may not abuse their authorities by accepting bribes or receiving other illegal income, and may not misappropriate company assets.
A committee member who causes loss to the company or its creditors due to his intentional misconduct or gross negligence shall be liable for damages.
Article 191 Where a company is declared bankrupt in accordance with the law, the company's bankruptcy liquidation shall be carried out in accordance with the relevant applicable laws.
