Legal analysis
Survival and division: refers to the division of a company into more than two companies, and the company continues to exist and establishes more than one new company; Dissolution and division: refers to the division of a company into more than two companies, and the dissolution of the company and the establishment of more than two new companies. In the separation mode, the company continues to exist, but the registered capital is reduced. The proportion of shares of the original shareholders in the company and the new company can remain unchanged. In practice, in order to expand assets and reduce investment risks, the head office often reorganizes its branches into wholly-owned subsidiaries with legal personality. At this time, the head office is also transformed into the parent company. The parent company is only responsible for the debts of the newly established subsidiary to the extent of its investment. Company division can take two forms: derivative division and newly established division, with different procedures and materials. Let's first look at what procedures the company needs to perform and what materials it needs to submit. If the company needs to be divided, the shareholders' meeting of the company shall make a resolution, and after fulfilling the obligations of notifying creditors and handling creditor's rights in accordance with the provisions of relevant laws, it shall submit relevant registration materials to the company registration authority and apply for change of registration. (1) Derivative separation: Derivative separation means that a company separates some assets to form one or more new companies, and the original company will survive. The newly established company shall go through the industrial and commercial registration, and the existing original company shall go through the registration of change. The surviving company after the division shall submit the following documents and certificates when handling the change registration: (1) Application for Company Change Registration signed by the legal representative of the company. (2) the separation agreement signed by the parties to the separation and the resolution of the company's shareholders' meeting (or its owner) agreeing to the separation (mainly indicating the main contents of the separation of several companies). (3) Newspapers and periodicals that have published at least three announcements of company division. (4) A description of the company's debt repayment guarantee. (5) The decision of the new shareholders' meeting of the company (mainly explaining: the total share capital and its composition, whether there is any change in the company's leadership, the revision of the company's articles of association and other matters that need to be changed). (6) amendments to the articles of association (mainly showing the comparison table of changes in the articles of association) or new articles of association. (7) Confirmation letter issued by all shareholders of the new shareholders' meeting.
legal ground
Article 176 of the Company Law of People's Republic of China (PRC), the debts before the division of the company shall be jointly and severally liable by the company after the division. However, unless the company and creditors reach a written agreement on debt settlement before division.