| Business, a Chinese commercial journal published in Sep.2008, claimed in areport that each year around150,000new enterprises were created in China, with100,000disappeared by the first year of their establishment, and60%of thosesurvived their first year went bankrupt within5years, and80%within10years,making the average lifespan of Chinese enterprises2.9years only. The company listand analysis report of Chinese Top500published by the Chinese EntrepreneurAssociation and the Chinese Enterprise Confederation on3rd Sep.2011suggestedthat the average lifespan of the top500Chinese enterprises was only23years. Facedwith this appalling Revelation, we can’t help to question whether our companies arecursed to be short-lived. Now move to the online data published by the PublicAdministration Bureau, Industrial and Commercial Administration of Hangzhou:There are168,151domestic enterprises in Hangzhou till the end of2010, among them165,559are supposed to be subject to the annual inspection of2010, yet only160,239of them actually accepted the inspection, with5,560domestic and foreign-fundedenterprises failed to accept the inspection. These absent enterprises are most likely berevoked of their business licenses for liquidation, however only scarce of them havemanaged to complete the liquidation before cancellation. More typically it is hard forthese bankrupt enterprises to present a clear picture of their debt profiles, for some ofthem can not force through their liquidation against various barriers, and some have a cluster of shareholders that pay no attention to the liquidation works, or reluctant toput in intensive resources in to such practices. The enterprises run into these troublesalways choose either to close down immediately, or to linger on until the final daycomes, with only handful of them sorted to the legal process to terminate theirbusinesses.Currently many legislative and academical efforts have been made in China onbusiness liquidation, which have taken shape in laws like the Company Law of thePeople’s Republic of China, administrative provisions like the AdministrativeProvisions on Registration of Business Entity by Administrative Laws and Regulations,administrative regulations like the Notice on Organization and Implementation ofLiquidation for Companies with Business License Revoked (Gongshagnqizi(2007) No.183) issued by the State Administration of Industry and Commerce, and legalinterpretations like the Supreme People’s Court’s Provisions on Several IssuesConcerning the Application of Company Law of the People’s Republic of China PartII. Also the Bankrupt Enterprise Law is also made to regulate such enterprises. Allthese laws and regulations are stating the truth that all businesses are required toconduct the liquidation after dissolution by law, except for the cases of corporatemerger and detachment. Typically a company that hasn’t approach bankruptcy tendsto conduct independent liquidation by ordinary procedures to allocate its residualassets and to settle its debts; those in insolvency that unable to cover their debts firstoff shall apply to the court for settlement through the bankruptcy proceedings.However, how can the shareholders or creditors secure their legal rights when thebusiness in debt fails to complete the liquidation through ordinary settlementprocedures for various reasons? Is it possible to create a new mechanism to bridge thegap between ordinary liquidation and bankruptcy liquidation?The author, after surfing through the relevant legislations around the world,found that the legislatures of Japan and Taiwan had made their special enterpriseliquidation systems to handle such problem, by which the businesses in trouble intheir liquidations were provided with an opportunity to carry on their settlements, andto avoid the costly and time-consuming bankruptcy proceedings. However, the special liquidation system is in fact a virgin land for Chineselegislatures both theoretically and practically. With such arrangement, manyenterprises and creditors are forced to suffer the loss of assets and compromise to theirlegal rights, since they have no access to the help from the court to overcome thebarriers on their way to liquidation after they failed to complete the ordinaryliquidation. Some companies even explored this legislative loophole to evade theirobligations on liquidation malignantly, in order the drain off the assets of the companybefore it collapses, which have severely compromised the benefits of the shareholders,and posed significant disturbance to the normal order of economy.The declining global economy has made the life harder for enterprises, and thecomplexity and high demand of business liquidation are making the situation worse.The special liquidation system as a bridge on the gape of ordinary liquidation andbankruptcy liquidation is proved to be valuable for liquidators to handle thediversified and characterized liquidation tasks, which worths further studies, and shallbe actively introduced and adopted to complete the business liquidation system inChina, and to establish the normalized exit mechanism for Chinese enterprises.This dissertation proceeds from a couple of fundamental concepts to introduce inthe special liquidation systems of Japan and Taiwan, followed by a preliminaryscheme for the establish of such system in China.Chapter I This chapter starts with the basic knowledge on the specialliquidation system, including the fundamental concepts, the initiation of specialliquidation, special liquidator, meeting of creditors and the court processing thespecial liquidation cases, and then provides a picture of current researches on suchsystem in China.Chapter II Special Liquidation Systems in Japan and Taiwan This chapterstarts from the background information of the special liquidation system in Japan,including the legislative background of the system, how this system is initiated,participants in the special liquidation, negotiation mechanism and proceduretermination. Afterwards the information of the special liquidation system of Taiwan ispresented, focusing on the difference of Taiwan’s system with the Japanese system. The features of these systems are summarized in the end of the chapter.Chapter III Take into account the legislative experiences of Japan and Taiwanto introduce in the special liquidation system, and to further complete system in China.This chapter starts by presenting the history of legislative exploration on such system,following by suggestions on the way to establish such system in China... |
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