What should I do after the bankruptcy of a limited company wholly owned by natural persons?

A limited company wholly owned by a natural person goes bankrupt and needs to liquidate its debts. According to the relevant laws and regulations, the natural person company can't continue to operate because it can't pay off its due debts, and the court declares it to stop operating and needs to clear its creditor's rights and debts.

Legal analysis

A wholly-owned company is an enterprise with independent legal personality, which is independently invested and established by an investor and owned by the investor. When facing bankruptcy and dissolution, general enterprises need to liquidate their debts, and sole proprietorship enterprises are no exception, and they also need to bear unlimited liability for their debts. Before or during the liquidation, investors shall not transfer or conceal their property without permission, otherwise the court may recover their property according to law and punish them according to relevant regulations. If the investor's behavior constitutes a crime, he shall be investigated for criminal responsibility according to law. The debts of a sole proprietorship enterprise shall be paid off in the following order: first, the wages of enterprise employees and social insurance expenses. In order to protect the rights and interests of workers and social stability, corporate debt settlement should first protect the rights and interests of workers. Second, the tax owed by the enterprise. It is necessary to pay off the taxes owed by the enterprise during its existence to the relevant departments. Third, other debts of the enterprise. For the debts that the enterprise's property is insufficient to pay off, the investor shall pay off the debts of the enterprise with his other property.

legal ground

Article 28 of the Law of People's Republic of China (PRC) on Sole proprietorship Enterprises: After the dissolution of a sole proprietorship enterprise, the original investor is still liable for paying off the debts of the sole proprietorship enterprise during its existence, but if the creditor fails to make a claim for paying off the debts to the debtor within five years, the liability shall be extinguished.

Article 29 When a sole proprietorship enterprise is dissolved, its property shall be paid off in the following order: (1) Wages and social insurance fees owed to employees; (2) tax arrears; (3) Other debts.

Article 30 During the liquidation period, a sole proprietorship enterprise shall not engage in business activities unrelated to the liquidation purpose. Before paying off debts in accordance with the provisions of the preceding article, investors shall not transfer or conceal their property.