The Research Of Company’s Compulsory Liquidation Procedure

Liquidated regulation of the company is not only an important content of thecompany’s corporate legal system, but also an important legal protection in accordancewith due process of law, legitimate reason to withdraw from the competitive market tomaintain market security, protection of shareholders, creditors and the legitimate interestsof stakeholders. Based on the liquidation of the company ’s legal origin in our country,liquidation of the company can be divided into bankruptcy liquidation and dissolutionliquidation; dissolution liquidation also can be divided into self-liquidation andcompulsory liquidation. Forced liquidation company mainly refers to the company’s ownliquidation cannot start or meet with obstacles, and starting a liquidation through theintervention of public power. Compulsory liquidation procedure is a special procedure incivil, and it’s a non-litigation procedure in nature. In accordance with the provisions ofexisting laws, compulsory liquidation cases unified by the people’s court supervisor.The legislation of company’s compulsory liquidation procedure in our country,except Companies Act, scatters in different judicial interpretations, meeting minutes andlegal guidance, and that is lack of good unity and systematicness. In the research ofsystems and procedure of a forced liquidation, many scholars make the relevanttheoretical researches focusing on protecting the interests of creditors of the company inliquidation. But there is less systematic researches of the protection of shareholders’interests for mainline in compulsory liquidation procedure, which start from thetheoretical basis of the Companies Act and the theoretical analysis of liquidation value. In view of the aforementioned topics and research points, this paper runs through twomain lines: one is combing company compulsory liquidation procedure according to thecurrent law in our country, to inspection the shortage of our country’s compulsoryliquidation procedure legislation under the conception of justice, interest and efficiencyand try to put forward suggestions for improvement. The other main line focuses onprotecting the interests of shareholders, to explore the comprehensive and systematicways to protect the interests of shareholders of the compulsory liquidation procedure.This paper can be divided into four parts. The first part is launched from thecompany compulsory liquidation proceedings. Firstly, the author introduces three reasonsof starting the compulsory liquidation as below:1. Dissolution of the company fails to setup a liquidation group;2. set up liquidation group but deliberately delayed liquidation;3.Illegal liquidation that may seriously harm the interests of the creditors or theshareholders. Secondly, the author analyzed the application processes, supervisor and thecompetent and jurisdiction of the compulsory liquidation, including its review andacceptance procedures, then the author made suggestions for improvement. Thereinto,the investigation of compulsory liquidation includes written investigation and hearinginvestigation.In the second part, the author researched and discussed about the notification andannouncement program of compulsory liquidation. The main contents are as below:1.elaborating the legal provisions of informing and noticing creditors and the scope andlevel of media announcement;2. proposing suggestions to increase liquidation team toinform shareholder in each important part, in order to protect shareholders’ right to know,to participate, to supervise the liquidation team and other legitimate rights;3. introducingthe situation of court’s notices and announcement in compulsory liquidation procedure.The third part mainly discussed the liquidation procedure of the company’scompulsory liquidation. From the establishment of the liquidation team specified bypeople’s court, to liquidating the company property, informing and noticing the creditors,declaring and confirming the creditor’s rights, formulating and confirming the liquidationscheme, liquidation distribution and making and confirming the liquidation report. Eachstep is a chain, followed by convergence, and cannot be arbitrarily crossed or reversed. Shareholders are the ultimate owners; they enjoy the rights to distributing remainingassets during the liquidation. Therefore, the author suggested that the rights to know, toparticipate and to supervise of shareholders should be completely protected incompulsory liquidation, and that should be reflected on the legislative design in each partof the compulsory liquidation.In the last part, the author made a summarization of four ending ways of the currentcompulsory liquidation:1.the end of the completion of compulsory liquidation procedure;2.the end of the withdrawal of the application of compulsory liquidation;3.turncompulsory liquidation into bankruptcy liquidation;4. end up the compulsory liquidationprocedure on account of inability to liquidation or fully liquidation. Furthermore, theauthor elaborated the make and confirmation of compulsory liquidation report, as well asthe practical situation of cancellation of registration in compulsory liquidation.