Speech on the Enterprise Bankruptcy Law

Author: Xu Yongqian
Publisher:
Publish Date: 2006-09-01
Features: Bankruptcy is an ancient legal system for resolving debt crises. It establishes a set of procedures for bankruptcy applications, acceptance, restructuring, bankruptcy declaration, and debt repayment, regulating the trial of bankruptcy cases, bankruptcy liquidation, and enterprise rescue. It ensures that incurable enterprises are promptly liquidated to protect the legitimate rights and interests of creditors, debtors, and employees as much as possible, while giving hope to enterprises with rescue potential a second chance to revitalize through mediation and restructuring, avoiding liquidation. As a "life support system" for troubled enterprises under the market economy, bankruptcy plays a crucial role in purifying the market environment and maintaining market order. As early as 1988, China implemented the Enterprise Bankruptcy Law (Trial Version), but this law was limited to state-owned enterprises, had relatively simple procedures, and lacked a comprehensive system for rescuing struggling enterprises, making it difficult to achieve the desired results. After 12 years of drafting and repeated discussions and revisions by a drafting group composed of relevant legislative bodies, departments under the State Council, the Supreme People's Court, and some research, consulting, and teaching institutions, the third session of the 10th National People's Congress reviewed the draft three times. The Enterprise Bankruptcy Law of the People's Republic of China (hereinafter referred to as the Enterprise Bankruptcy Law) was officially passed on August 27, 2006, and will take effect on June 1, 2007. The newly enacted Enterprise Bankruptcy Law is an important legal document in China's socialist market economy legal system. Together with laws such as the Company Law, Partnership Enterprise Law, and Sole Proprietorship Enterprise Law, it constitutes the legal framework for market entities in China, regulating the entire process of enterprise establishment and growth, competition and mergers, mediation and restructuring, as well as liquidation and "death." This Enterprise Bankruptcy Law summarizes the implementation experience of the Enterprise Bankruptcy Law (Trial Version) and the Supreme People's Court's adjudication of bankruptcy cases, incorporates successful practices from the bankruptcy of state-owned enterprises, and introduces internationally recognized and China-specific practices related to bankruptcy, making it a completely new law.
Preface
Bankruptcy is an ancient legal system for resolving debt crises. It establishes a set of procedures for bankruptcy applications, acceptance, restructuring, bankruptcy declaration, and debt repayment, regulating the trial of bankruptcy cases, bankruptcy liquidation, and enterprise rescue. It ensures that incurable enterprises are promptly liquidated to protect the legitimate rights and interests of creditors, debtors, and employees as much as possible, while giving hope to enterprises with rescue potential a second chance to revitalize through mediation and restructuring, avoiding liquidation. As a "life support system" for troubled enterprises under the market economy, bankruptcy plays a crucial role in purifying the market environment and maintaining market order. As early as 1988, China implemented the Enterprise Bankruptcy Law (Trial Version), but this law was limited to state-owned enterprises, had relatively simple procedures, and lacked a comprehensive system for rescuing struggling enterprises, making it difficult to achieve the desired results. After 12 years of drafting and repeated discussions and revisions by a drafting group composed of relevant legislative bodies, departments under the State Council, the Supreme People's Court, and some research, consulting, and teaching institutions, the third session of the 10th National People's Congress reviewed the draft three times. The Enterprise Bankruptcy Law of the People's Republic of China (hereinafter referred to as the Enterprise Bankruptcy Law) was officially passed on August 27, 2006, and will take effect on June 1, 2007. The newly enacted Enterprise Bankruptcy Law is an important legal document in China's socialist market economy legal system. Together with laws such as the Company Law, Partnership Enterprise Law, and Sole Proprietorship Enterprise Law, it constitutes the legal framework for market entities in China, regulating the entire process of enterprise establishment and growth, competition and mergers, mediation and restructuring, as well as liquidation and "death." This Enterprise Bankruptcy Law summarizes the implementation experience of the Enterprise Bankruptcy Law (Trial Version) and the Supreme People's Court's adjudication of bankruptcy cases, incorporates successful practices from the bankruptcy of state-owned enterprises, and introduces internationally recognized and China-specific practices related to bankruptcy, making it a completely new law.
Deeply studying and implementing the Enterprise Bankruptcy Law is of extremely great significance for promoting the merger and reorganization of advantageous enterprises into struggling enterprises, self-rescue for enterprises facing debt crises, restructuring and mediation for enterprises entering bankruptcy procedures, and the smooth exit of "ailing" enterprises, thereby purifying the market environment, optimizing market entities, and ultimately promoting the development of the socialist market economy. To help readers study and understand this law, we have organized the writing of Speeches on the Enterprise Bankruptcy Law. This book briefly introduces the legislative process and main content of the Enterprise Bankruptcy Law and explains relevant implementation issues in 20 chapters, with the aim of assisting readers in learning, understanding, and enforcing this law. This is the preface.
Zhu Shaoping
September 12, 2006