Bankruptcy reorganization refers to the procedure to restore the profitability of an enterprise through reorganization, integration and reform in the case of bankruptcy. The purpose of bankruptcy reorganization is to protect the production and operation of enterprises and the interests of employees, at the same time protect the interests of creditors and avoid the assets of enterprises being deprived or sold at low prices. In bankruptcy reorganization, enterprises can negotiate with creditors, re-plan debts, reduce costs, increase income, and realize enterprise restructuring and reform.
Bankruptcy liquidation refers to the procedure of paying off debts by liquidating all or part of the assets of an enterprise when the enterprise cannot be reorganized. The purpose of bankruptcy liquidation is to protect the interests of creditors and pay off the debts of enterprises through the realization of enterprise assets. In bankruptcy liquidation, the assets of the enterprise will be auctioned or realized in other ways, and the proceeds will be used to pay off debts.
Generally speaking, the main difference between bankruptcy reorganization and bankruptcy liquidation lies in its purpose and method. Bankruptcy reorganization aims to protect the production and operation of enterprises and the interests of employees, while protecting the interests of creditors. Through the reorganization, integration and reform of enterprises, enterprises can return to profitability. Bankruptcy liquidation aims to protect the interests of creditors and pay off corporate debts by realizing corporate assets.
Legal basis:
Article 184 of the Company Law of People's Republic of China (PRC) The liquidation group shall exercise the following functions and powers during the liquidation period:
(1) Clean up the company's assets and prepare a balance sheet and a list of assets respectively;
(2) Notify and announce creditors.
(3) Handling the unfinished business of the company related to liquidation;
(four) to pay the taxes owed and the taxes generated in the liquidation process;
(5) Clearing up creditor's rights and debts;
(6) Disposing of the company's remaining property after paying off debts;
(seven) to participate in civil litigation activities on behalf of the company.
Article 186 of the Company Law of People's Republic of China (PRC) * * * After clearing up the company's assets, preparing the balance sheet and list of assets, the liquidation group shall formulate a liquidation plan and report it to the shareholders' meeting, shareholders' meeting or people's court for confirmation.
After paying the liquidation expenses, employees' wages, social insurance expenses and statutory compensation, paying the taxes owed and paying off the company's debts, the company's property shall be distributed according to the proportion of capital contribution of shareholders of a limited liability company and the proportion of shares of shareholders of a joint stock limited company.
During the liquidation period, the company shall survive, but shall not carry out business activities unrelated to liquidation. The company's property shall not be distributed to shareholders before it is paid off in accordance with the provisions of the preceding paragraph.
Article 185 of the Company Law of People's Republic of China (PRC) * * * The liquidation group shall notify the creditors within ten days from the date of its establishment and make an announcement in the newspaper within sixty days. Creditors shall, within 30 days from the date of receiving the notice, and within 45 days from the date of announcement if they have not received the notice, declare their claims to the liquidation group.
When a creditor declares its creditor's rights, it shall explain the relevant matters of the creditor's rights and provide supporting materials. The liquidation group shall register the creditor's rights.
During the declaration of creditor's rights, the liquidation group shall not pay off the creditors.