What are the reasons for the bankruptcy of enterprises?

The reason why an enterprise goes bankrupt is that it cannot pay off its due debts, is insolvent, obviously lacks solvency or has the possibility of obviously losing solvency. When an enterprise applies for bankruptcy, it needs to apply to the people's court of the debtor's domicile.

legal ground

Article 1 of the Enterprise Bankruptcy Law of the People's Republic of China

This Law is formulated with a view to standardizing the bankruptcy procedures of enterprises, clearing up the creditor's rights and debts fairly, protecting the legitimate rights and interests of creditors and debtors, and maintaining the order of the socialist market economy.

second

If an enterprise as a legal person is unable to pay off its due debts, 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.

essay

Bankruptcy cases shall be under the jurisdiction of the people's court of the debtor's domicile.

Article 6

When trying bankruptcy cases, the people's courts shall protect the legitimate rights and interests of employees of enterprises and investigate the legal responsibilities of managers of bankrupt enterprises according to law.