Article 14 of the Company Law stipulates that a company may set up branches. The establishment of a branch company shall apply to the company registration authority for registration and obtain a business license. A branch company does not have legal person status, and its civil liability shall be borne by the company. A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law.
Article 78 of the Provisions of the Supreme People's Court on Several Issues Concerning the Execution of People's Courts (Trial) stipulates that if a branch of an enterprise as a legal person cannot pay off its debts, it may be ruled as the person subjected to execution. If the property directly managed by an enterprise as a legal person is still unable to pay off the debts, the people's court may order the execution of the property of other branches of the enterprise as a legal person.