1, the enterprise must have caused serious losses due to poor management. The so-called serious loss generally refers to the situation that the company is insolvent and the total assets of the enterprise are less than the total debts.
2. The enterprise can't pay off the debts due. The company's inability to pay off its debts means that the company is in trouble, unable to repay its debts or unable to continue to repay its debts. In order to identify the company's solvency, we should generally pay attention to the following matters:
(1) The debtor is insolvent.
(2) What the debtor can't pay off is the debt that has expired, the debt that has been paid off, and the debt that is uncontroversial or has a clear name.
(3) Insolvency refers to the debtor's continuous insolvency for a long or foreseeable period of time, rather than temporary cash flow difficulties or temporary suspension of payment.
(4) Bankruptcy refers to the objective property status of the debtor, which should be decided by the court according to laws and facts, rather than its subjective understanding or expression.
Legal basis: Article 2 of the Enterprise Bankruptcy Law of the People's Republic of China. If an enterprise as a legal person is unable to pay off its debts due, its assets are insufficient to pay off all its debts or it obviously lacks solvency, it shall clear up its debts in accordance with the provisions of this Law.
An enterprise as a legal person may be reorganized in accordance with the provisions of this law if it has the circumstances specified in the preceding paragraph or obviously loses its solvency.