legal ground
Article 186 of People's Republic of China (PRC) Company Law
After clearing up the company's property, preparing the balance sheet and property list, the liquidation group shall formulate the liquidation plan and report it to the shareholders' meeting, shareholders' meeting or the 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.
Article 190
If the company is declared bankrupt according to law, it shall be liquidated in accordance with the Enterprise Bankruptcy Law.
Article 187
After clearing up the company's assets, compiling the balance sheet and list of assets, the liquidation group finds that the company's assets are insufficient to pay off debts, and shall apply to the people's court for bankruptcy according to law.
After the company is declared bankrupt by the people's court, the liquidation group shall hand over the liquidation affairs to the people's court.