Bankrupt Reason Study

The first and fundamental question in the legal system of insolvency is how to understand and comprehend the issue of the causes of bankruptcy, on the grounds that it is the source of standardizing bankruptcy, eliminating the false bankruptcy in commercial subjects delisting system and can influence the balance of interests between creditors and the debtor, and the stability of the whole market economic order. On the basis of the amendment of the new Bankruptcy Law to the causes of bankruptcy in old Bankruptcy Law, the paper discusses the gains and losses of the provisions of the causes of bankruptcy (the new "enterprise bankruptcy law," Article 2) in China's new "Enterprise Bankruptcy Law", from the angles of both theory and practice, by associating with the legislation concerning the causes of bankruptcy in developed countries, and connecting with the actual status quo of enterprise corporate bankruptcy, with the purpose of arriving at a comprehensive, objective, fair and thorough and meticulous assessment. Moreover, it gives suggestions about the reconstruction and improvement involved in the causes of bankruptcy. This paper follows the studying path which is "raising questions"—"analyzing questions"—"solving problem". Specifically, the structure of this paper is divided into three parts.The first part is the "raising questions" part about the value and significance of writing this paper, i.e. the meaning of studying the causes of bankruptcy. The article first defines the concept of the causes of bankruptcy, and then analyses the major theoretical and practical value of studying the causes of bankruptcy from the perspective of the creditors, the debtors and the socio-economic order.The second part is the first "analyzing questions" part about the legislation breakthrough and contributions made in China's new "Enterprise Bankruptcy Law" about the causes of bankruptcy .In this part, on the basis of the analysis of the defects and problems in the former "Enterprise Bankruptcy Law", the author, confirms the legislation progress made in China's new "Enterprise Bankruptcy Law" about the causes of bankruptcy from a development perspective and by means of a comparative analysis in the old bankruptcy legislation.The third part is the second "analyzing questions" part about the deficiencies and issues of causes of bankruptcy provided in the new "Enterprise Bankruptcy Law". The part starts from a comprehensive viewpoint by means of a comparative analysis of legislation in developed countries to analyze the elements of can-not-discharge, insolvent and stop-paying and their mutual relations from bankruptcy law theory, on the basis of which analyzes the deficiencies and defects of the causes of bankruptcy legislation in China's new "Enterprise Bankruptcy Law", and combines with the enterprise corporate insolvency practice to give a certain empirical analysis on China's new "Enterprise Bankruptcy Law" about the practical problems concerning the causes of bankruptcy provisions.The third part is the "solving problem" part about some opinions and suggestions of the improvements and reconstructions with regard to the causes of bankruptcy in the new "Enterprise Bankruptcy Law". The part puts forth some of my own suggestions and recommendations about amendments and improvement towards the deficiencies and issues of causes of bankruptcy provided in the new "Enterprise Bankruptcy Law": The first one is to apply "can-not-discharge" to corporate insolvency as a general reasons for bankruptcy and at the same time to presume those debtors who stop paying the debt in a continuous state presumed to be liquidated; In addition, if the creditors petition the claim for bankruptcy, the amount of claims should be appropriately restricted. The second one is to regard the "insolvent" as the basic reason of can-not-discharge's presumption or supporting reason which can be applied to the company limited by shares and other financing companies. The third one is to take "insolvency" as the only reason for bankruptcy in the liquidation of the enterprise.