Legal analysis: there are two legal forms of company division: 1. A newly established department. The newly established separation is also called dissolution separation. In other words, the legal subject qualification of the original company will be eliminated and two or more new companies with legal person qualification will be established. In the new division, the property of the original company will be redistributed and merged according to the nature, purpose and business scope of each newly established company. At the same time, the original company is dissolved, and the creditor's rights and debts are borne by the newly established company. 2. Derivation and separation. Derivative separation, also known as survival separation. In other words, the legal subject of the original company still exists, and only part of the business is set aside to set up a new company. During the period of division, the original company continues to exist, and the creditor's rights and debts of the original company can be borne by the original company and the new company respectively, or independently by the original company as agreed. The new company obtained the legal person status, and the original company continued to retain the legal person status.
Legal basis: People's Republic of China (PRC) Company Law.
Article 175 When a 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.