Where the implementation of an unconfirmed liquidation scheme causes losses to the company or any creditors, and the company, any shareholders or creditors claim that the members of the liquidation group shall assume the liability of compensation, the people's court shall support the claim.

Article 16 Where liquidation is organized by the people's court, the liquidation group shall conclude the liquidation within six months after its formation.

Where the liquidation cannot be concluded within six months due to special reasons, the liquidation group shall apply to the people's court for extension.

Article 17 Where the liquidation group designated by the people's court finds out that the properties of the company cannot pay off debts totally when liquidating properties of the company and formulating the balance sheet and assets lists, it may work out a relevant debt repayment scheme with creditors upon negotiation.

Where the debt repayment scheme is confirmed by all creditors and does not damage the interests of other interested parties, the people's court may decide to acknowledge the scheme upon application of the liquidation group. The liquidation group shall file an application with the people's court for deciding the termination of the liquidation procedure after debts have been paid off according to the said repayment scheme.

Where any creditors do not confirm or the people's court does not acknowledge the repayment scheme, the liquidation group shall file an application with the people's court for announcement of bankruptcy according to law.

Article 18 Where the shareholders of a company with limited liabilities or the directors and controlling shareholders of a joint stock company fail to set up a liquidation group to start liquidation within the statutory time limit, and hence causes depreciation, run-off, damage or loss of properties of the company, if any creditors claim that the aforesaid shareholders, directors and controlling shareholders shall assume the liability of compensation for the debts of the company within the scope of losses, the people's court shall support the claim according to law.

Where the shareholders of a company with limited liabilities or the directors and controlling shareholders of a joint stock company cause the loss of main properties, account books and major documents of the company due to their failure in performing their obligations and hence cause the liquidation unable to be conducted, if any creditors claim that the aforesaid shareholders, directors and controlling shareholders shall be jointly liable for paying off the debts of the company, the people's court shall support the claim according to law.

Where any of the aforesaid circumstances are caused by actual controllers, if the creditors claim that the actual controllers shall assume the corresponding civil liabilities for the debts of the company, the people's court shall support the claim according to law.

Article 19 Where the shareholders of a company with limited liabilities, the directors and controlling shareholders of a joint stock company, and the actual controllers of a company maliciously dispose of company properties after dissolution of the company and hence cause losses to any creditors, or cheat the company registration organ to cancel the registration of the company with a false liquidation report without legitimate liquidation, if any creditors claim that the aforesaid shareholders, directors, controlling shareholders and actual controllers shall assume the corresponding civil liability for the debts of the company, the people's court shall support the claim according to law.

Article 20 The cancellation of registration shall be handled after the liquidation has been concluded according to law. Where the company handles cancellation of registration without liquidation, hence causing liquidation of the company unable to be conducted, if any creditors claim that the shareholders of the company with limited liabilities, the directors and controlling shareholders of the joint stock company and actual controllers of the company shall assume the liability of paying off the debts of the company, the people's court shall support the claim.

Where the company handles cancellation of registration without liquidation according to law and its shareholders or the third party commit to assuming liabilities for the debts of the company at the company registration organ in the course of cancellation of registration, if any creditors claim that the aforesaid shareholders and the third party shall assume corresponding civil liabilities for the debts of the company, the people's court shall support the claim according to law.

Article 21 Where the shareholders of a company with limited liabilities, the directors and controlling shareholders of a joint stock company, and the actual controllers of a company are two or more persons, and one or several of them claim, after assuming civil liabilities provided for in Article 18 and Item 1 of Article 20 of these Provisions, that the others shall share the liabilities based on the degree of their faults, the people's court shall support the claim.

Article 22 At the time of company dissolution, the unpaid capital contributions of shareholders shall all be deemed as liquidation properties. The unpaid capital contributions of shareholders include the payable capital that has not been paid yet and the capital that shall be contributed by installment and has not expired according to Articles 26 and 81 of the Company Law.

Where the company's properties are insufficient to pay off debts, and any creditors claim that the shareholders having not paid their capital contributions and other shareholders or initiators for the establishment of the company shall jointly assume the liabilities for the debts of the company within the scope of unpaid capital contributions, the people's court shall support the claim.

Article 23 Where any members of the liquidation group violate any laws, administrative regulations or articles of associations of a company during liquidation, hence causing losses to the company or any creditors, if the company or the creditors claim the said members shall assume the liability of compensation, the people's court shall support the claim according to law.

Where any shareholders of a company with limited liabilities or those of a joint stock company who, separately or jointly, hold 1 percent or more of the company's shares for consecutive 180 days or more, file a lawsuit with the people's court according to Item 3 of Article 152 of the Company Law on the ground that any members of the liquidation group have the act provided in the previous paragraph, the people's court shall accept the lawsuit.

Where the company has its registration cancelled after liquidation, and the aforesaid shareholders file a lawsuit with the people's court directly against the members of the liquidation group by taking other shareholders as the third party according to Item 3 of Article 152 of the Company Law, the people's court shall accept the lawsuit.

Article 24 A company dissolution lawsuit and a company liquidation case shall be subject to the jurisdiction of the people's court at the place where the company is domiciled. The domicile of a company refers to the place where the principal office of a company is located. Where the office of a company is unclear, the cases shall be subject to the jurisdiction of the people's court at the place where the company is registered.

A basic people's court shall have the jurisdiction over the cases for dissolution and liquidation of the companies registered upon approval of the company registration organs at the level of county, county-level city or district. An intermediate people's court shall have the jurisdiction over the cases for dissolution and liquidation of the companies registered upon approval of the company registration organs at or above the level of prefecture or prefecture-level city.

Source: www.fdi.gov.cn