Legal basis: Article 187 of the Company Law of People's Republic of China (PRC). 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.