As a general principle, shareholders' capital contribution can only be distributed when there is surplus after all the following debt matters are paid off.
According to the relevant provisions of the Civil Procedure Law and the Enterprise Bankruptcy Law, the order in which assets of bankrupt enterprises are used to pay off debts is as follows:
1. Creditors and debtors owe each other debts to offset the debtor's property;
2. Secured creditor's rights;
3. After paying off the bankruptcy expenses and debts, the bankrupt property shall be paid off 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.
4. If there are surplus assets, the shareholders shall distribute them according to the proportion of capital contribution.
Debt settlement refers to the debtor's performance of debts in accordance with the provisions of the law or the contract, and the dissolution of the relationship between creditor's rights and debts. Debt settlement is an important link in the process of enterprise debt management and the premise of realizing continuous debt management. At the same time, debt settlement is an important financial work in the daily business activities of enterprises. For specific enterprises, debt settlement is conducive to maintaining a good reputation and laying the foundation for further borrowing; It is conducive to strengthening the crisis awareness of enterprises and enhancing the concept of benefits of enterprises; It is beneficial for enterprises to adjust their financial structure in time and create conditions conducive to improving economic efficiency.
Legal basis:
Enterprise Bankruptcy Law of the People's Republic of China
Article 2 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. An enterprise as a legal person may be reorganized in accordance with the provisions of this law if it has the circumstances specified in the preceding paragraph or obviously loses its solvency.