First, verify the financial situation.
First of all, the company should comprehensively verify its financial situation, including assets, liabilities, owners' equity, etc. To ensure that the fact of insolvency is accurate.
Two. Negotiate with creditors
After confirming that the assets are insolvent, the company should take the initiative to communicate with creditors, explain the company's predicament, and seek the understanding and support of creditors. Both parties can negotiate to formulate repayment plan or debt restructuring plan to reduce the debt pressure of the company.
Three. Commencement of bankruptcy proceedings
If the negotiations with creditors fail to make effective progress, the company may consider starting bankruptcy proceedings. Bankruptcy procedures include bankruptcy liquidation and bankruptcy reorganization. Bankruptcy liquidation refers to paying off debts by liquidating the company's assets, while bankruptcy reorganization refers to restoring the company's solvency by adjusting the company's business strategy and debt structure.
Before starting bankruptcy proceedings, the company needs to apply to the local people's court and submit relevant materials. The people's court will conduct a review according to law and decide whether to accept the bankruptcy application.
Fourth, deal with debts according to law.
In the bankruptcy proceedings, the company will handle debts according to the procedures and requirements stipulated by law. This may include reaching a settlement agreement with creditors, selling assets to pay off debts, etc.
Verb (abbreviation for verb) protects employees' rights and interests.
Companies should also pay attention to the rights and interests of employees when dealing with insolvency. The company shall pay the wages, benefits and other expenses of employees according to law, and arrange reasonable resettlement plans for employees if possible.
To sum up:
When the company is insolvent, it should fully verify its financial status, negotiate with creditors, start bankruptcy procedures when necessary, and deal with debts according to law. In the whole process, the company should pay attention to the rights and interests of employees to ensure that the legitimate rights and interests of employees are protected.
Legal basis:
Enterprise Bankruptcy Law of the People's Republic of China
Article 2 provides that:
If an enterprise as a legal person is unable to pay off its due debts, its assets are insufficient to pay off all its debts or it obviously lacks solvency, it shall clear up its debts in accordance with the provisions of this Law.
Enterprise Bankruptcy Law of the People's Republic of China
Article 7 provides that:
The debtor may apply to the people's court for reorganization, reconciliation or bankruptcy liquidation under the circumstances specified in Article 2 of this Law.
If the debtor is unable to pay off the debts due, the creditor may apply to the people's court for reorganization or bankruptcy liquidation of the debtor.
If an enterprise as a legal person has been dissolved but has not been liquidated or its assets are insufficient to pay off its debts, the person liable for liquidation according to law shall apply to the people's court for bankruptcy liquidation.