Internal decision-making procedure
1. Convene the board of directors of the company. The board of directors makes resolutions on the division of the company, and formulates a division plan and a division agreement (draft).
2. Convene a general meeting of shareholders. The board of directors submits the company's division proposal to the shareholders' (general) meeting for voting, and the voting shall be conducted in accordance with the company's special rules of procedure.
(2) Drafting a resignation plan or resignation agreement.
The division plan shall be formulated and passed by the board of directors of the division company and must be submitted to the shareholders' (general) meeting of the company for voting.
The separation agreement is a legal document reached by the board of directors of the separated company and the other company through consultation, and submitted to their respective shareholders' meetings for approval after the resolution is passed.
(3) Division of property
After the separation is approved, the separated enterprise shall organize personnel to divide the property, and need to prepare a new balance sheet and property list.
(4) fulfilling the obligation to notify creditors.
According to the Company Law, the company shall notify the creditors within 10 days from the date of making the resolution of separation, and make an announcement in the newspaper within 30 days. If the creditor has any objection, it shall make corresponding arrangements in accordance with the provisions.
(5) Go through the formalities of examination, approval and registration of company division.
1, approval procedure
For the separation of foreign-invested enterprises, it needs the approval of the foreign-funded authorities, for listed companies, it needs the approval of the CSRC, and for state-owned enterprises, it needs the approval of the state-owned assets management department.
2. Go through the formalities of industrial and commercial change registration.
Where the division of a company involves the change of registered items, it shall go through the formalities for registration of change with the company registration authority according to law; Where the dissolution of the company is involved, the cancellation of registration shall be handled; Where the establishment of a new company is involved, the establishment registration formalities shall be handled according to law.
Company division refers to the act that a company is divided into two or more companies through separation agreements and resolutions of shareholders' meetings without liquidation procedures and in accordance with legal procedures and conditions. Company division is a legal act, which involves not only the change of the company, but also the creditor's rights and debts of the company and the interests of relevant parties, and must be carried out in accordance with legal procedures. When a company is divided, its property shall be divided accordingly, and a balance sheet and a list of property shall be prepared. The company shall notify the creditors within 10 days from the date of making the resolution of separation, and make an announcement in the newspaper within 30 days. The debts before the division of the company shall be borne by the company after the division according to the agreement reached.
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.
Legal basis:
Article 90 of People's Republic of China (PRC) Contract Law. If the parties merge after concluding a contract, the merged legal person or other organization shall exercise its contractual rights and perform its contractual obligations. If the parties are divided after concluding a contract, unless otherwise agreed by the creditors and debtors, the separated legal person or other organization shall enjoy the joint and several creditor's rights and obligations stipulated in the contract and bear joint and several debts.
Article 175th of the Company Law of People's Republic of China (PRC). When the company is divided, its property shall be divided accordingly.
When the company is divided, it shall prepare a balance sheet and a list of assets. The company shall notify the creditors within 10 days from the date of making the resolution of separation, and make an announcement in the newspaper within 30 days.
Article 176 The debts of the company before division shall be jointly and severally liable by the company after division. However, unless the company and creditors reach a written agreement on debt settlement before division.