Legal Significance of Enterprise Bankruptcy

When the company is poorly managed and insolvent, many people will choose to file for bankruptcy and declare their business failure, but many people have doubts. Why did they file for bankruptcy? Just close the door and go bankrupt Today, Dongguan Li Huaxing Finance will explain it to you, and by the way, talk about bankruptcy-related knowledge.

First, the concept of bankruptcy.

Bankruptcy refers to a legal system in which the creditor or debtor requests the court to declare bankruptcy and repay the debt according to the bankruptcy procedure when the debtor is unable to repay the debt or insolvent. The narrow bankruptcy system only refers to the bankruptcy liquidation system, and the broad bankruptcy system also includes the reorganization and reconciliation system. Bankruptcy refers to a kind of enterprise behavior and economic behavior in most cases. However, people are sometimes used to saying that individuals or companies stop operating, which is also called bankruptcy.

Second, why did the company file for bankruptcy?

According to the provisions of the bankruptcy law, an enterprise as a legal person can apply for bankruptcy if its assets are insufficient to pay off all debts or obviously lack solvency. In fact, although bankruptcy is a forced choice and the result of business failure, to a certain extent, bankruptcy is the protection of enterprises, especially shareholders.

Because according to the company law, the shareholders of the company shall bear limited liability to the extent of their capital contribution, then when the company is poorly managed and insolvent, the company will file for bankruptcy and pay off the remaining property, and the unpaid part does not need to be paid off by shareholders; For creditors, if the company is really in poor operation and unable to repay, it is better to apply for bankruptcy, conduct liquidation and sell off the remaining assets for partial repayment, which is also a better choice. Moreover, if you apply for bankruptcy, you can also go through bankruptcy reorganization if the situation meets, and new opportunities may arise. Moreover, after filing for bankruptcy, there is no need to pay various taxes of the state.

Third, the characteristics of bankruptcy.

(1) The debtor cannot pay off the debts due.

"Maturity debt" refers to the debt that has reached the time limit for paying off debts; "Liquidation" means full repayment; "Insolvency" refers to various possibilities of not being able to pay off on time. Of course, the bankruptcy of the debtor cannot be regarded as "bankruptcy".

(2) There are many creditors.

If there is only one creditor, go through the general civil enforcement procedure. In the case of the largest number of creditors, if the general civil enforcement procedure is adopted, some creditors may not be paid off or only get a small amount of payment because of competing requests to enforce the debtor's property, which leads to obviously unfair results. Therefore, a special procedure-bankruptcy procedure is needed to ensure the fairness of creditors' profits and losses.

(3) Creditors get fair compensation.

All the debtor's property is not enough to pay off all the debts, which determines that the creditor cannot realize all the debts. According to the requirement of "homogeneous creditor's rights and equal status", the debtor's property must be distributed among creditors in the same proportion according to the legal order to ensure fairness among creditors.

(4) forgive outstanding debts.

Fourth, malicious bankruptcy

Generally speaking, the international judicial community generally believes that malicious bankruptcy is mainly manifested in the following two situations:

One is that the debtor maliciously applied for bankruptcy to avoid debt;

The other is that creditors maliciously file bankruptcy applications for the purpose of damaging the debtor's commercial reputation.

If the people's court considers that the applicant has maliciously applied for bankruptcy after examination, it will no longer accept its bankruptcy application, and even if it has been accepted, it will rule that its bankruptcy application will be rejected, which will prevent some enterprises from trying to evade their debts by applying for bankruptcy.