Legal basis: Article 3 of People's Republic of China (PRC) Company Law is an enterprise legal person with independent legal person property and legal person property rights. The company is liable for its debts with all its property. Shareholders of a limited liability company shall be liable to the company with the amount of capital contribution they have subscribed; Shareholders of a joint stock limited company shall be liable to the company with the shares subscribed by them.
Enterprise Bankruptcy Law of the People's Republic of China
Article 113 The bankrupt shall first repay the wages, medical care, disability allowance and pension expenses owed to the employees, the basic old-age insurance and basic medical insurance expenses owed to the employees' personal accounts, and the compensation that should be paid to the employees according to laws and administrative regulations; Secondly, repay the social insurance premiums and taxes owed by the bankrupt; Finally, repay the ordinary bankruptcy claims. If the bankruptcy property is insufficient to pay off the repayment requirements in the same order, it shall be distributed in proportion. To sum up, after an enterprise goes bankrupt, it shall pay off all the debts of the bankrupt's property. If it cannot be repaid in full, it shall be repaid in strict accordance with the law and in the order of repayment.
Article 113 After the bankruptcy expenses and interest-bearing debts are paid off, the bankruptcy property shall be paid off first in the following order: (1) The wages, medical care, disability allowance and pension expenses owed by the bankrupt to the employees, the basic old-age insurance and basic medical insurance expenses owed to the employees' personal accounts, and the compensation that should be paid to the employees according to laws and administrative regulations; (2) Social insurance premiums and taxes owed by the bankrupt other than those specified in the preceding paragraph; (3) Ordinary bankruptcy claims. If the bankruptcy property is insufficient to pay off the repayment requirements in the same order, it shall be distributed in proportion. The wages of directors, supervisors and senior managers of bankrupt enterprises shall be calculated according to the average wages of employees of the enterprise.