Chapter X Merger, Division, Capital Increase, Capital Reduction, Dissolution and Liquidation


Section 1 Merger, Separation, Capital Increase and Capital ReductionArticle 189 A merger may take the form of an absorption merger or a new merger.
A company absorbs other companies to absorb mergers, and the absorbed company is dissolved. Two or more companies merged to establish a new company for the new merger, and the combined parties were dissolved.
Article 190 In a merger of companies, the parties to the merger shall sign a merger agreement and prepare a balance sheet and a list of assets. The company shall notify the creditor within 10 days from the date of the merger resolution and announce it on China Securities Journal, Securities Times, and CNINFO.com within 30 days. Within 30 days from the date of receipt of the notice, the creditor may request the company to repay the debt or provide corresponding guarantee within 45 days from the date of the announcement.
Article 191 When a company is merged, the creditor's rights and debts of the parties to the merger shall be inherited by the surviving company or the newly established company after the merger.
Article 192 The company is divided and its property is divided accordingly.
In the event of a division of the company, a balance sheet and a list of assets should be prepared. The company shall notify the creditor within 10 days from the date of the resolution for division, and shall make an announcement on the “China Securities Journal”, “Securities Times”, and “Chuchao Information Network” within 30 days.
Article 193 The company’s debt before division shall be jointly and severally liable by the company after the division. However, unless otherwise agreed by the written agreement reached between the company and the creditor regarding the settlement of the debt.
Article 194 When the company needs to reduce its registered capital, it must prepare a balance sheet and a list of assets.
The company shall notify the creditors within 10 days from the date of the resolution to reduce the registered capital, and within 30 days, the company’s articles of incorporation will be announced on the “China Securities Journal”, “Securities Times” and “cninfo.com”. Within 30 days from the date of receiving the notice, the creditor has the right to request the company to pay off the debt or provide corresponding guarantee within 45 days from the date of the announcement.
After the company's capital reduction, the registered capital will not be lower than the statutory minimum limit.
Article 195 Where a company merges or is divided and any change in registered items occurs, it shall go through the change registration with the company registration authority according to law; if the company is dissolved, it shall go through the cancellation registration of the company according to law; if the new company is established, it shall go through the registration of company establishment according to law. . When a company increases or reduces its registered capital, it shall go through the change registration with the company registration authority according to law.


Section 2 Dissolution and liquidation
Article 196 The company is dissolved for the following reasons:
(1) The expiry of the term of business as stipulated in the Articles of Association or other causes of dissolution as stipulated in the Articles of Association;
(B) dissolution of the shareholders' general meeting resolution;
(3) Dissolution due to the merger or division of the company;
(4) The business license was revoked according to law, ordered to be closed or cancelled;
(5) If the company's operation and management are seriously distressed and continue to exist and cause substantial losses to shareholders, and if it cannot be resolved through other channels, shareholders holding more than 10% of the company’s shareholders’ voting rights may request the People’s Court to dissolve the company.
Article 197 Where a company has the situation described in item (1) of Article 196 of these Articles of Association, it may survive the amendment of the Articles of Association.
The amendment of the Articles of Association in accordance with the provisions of the preceding paragraph shall be approved by more than two-thirds of the voting rights held by the shareholders attending the shareholders meeting.
Article 198 Where a company is dissolved due to the provisions of Article 196, Items (1), (2), (4), and (5) of this Articles of Association, the matter shall be dissolved. The liquidation team will be established within 15 days from the date of occurrence and the liquidation will start. The liquidation group is composed of the directors or the shareholders determined by the shareholders meeting. If the liquidation group is not established within the time limit for liquidation, the creditor may apply to the people's court to designate the relevant personnel to form a liquidation group for liquidation.
Article 199 During the liquidation period, the liquidation team exercises the following powers: the company’s articles of association
(1) Clean up the company's assets and prepare balance sheets and property lists separately;
(b) notices, announcements of creditors;
(3) to deal with the company's pending business related to liquidation;
(4) Settlement of taxes owed and taxes incurred in the course of liquidation;
(5) Cleaning up creditor's rights and debts;
(6) Dealing with the remaining property after the company has paid off its debts;
(7) Participate in civil litigation activities on behalf of the company.
Article 200 The liquidation group shall notify the creditor within 10 days from the date of its establishment, and shall make an announcement on the "China Securities Journal", "Securities Times" and "cninfo.com" within 60 days. The creditor shall declare its claims to the liquidation team within 30 days from the date of receipt of the notice and within 45 days from the date of the announcement of the announcement that has not received the notice.
When a creditor declares a creditor’s right, it shall explain the related matters of the creditor’s right and provide proof. The liquidation team should register the claims.
During the reporting period of claims, the liquidation team shall not pay off creditors.
Article 201 After the liquidation group cleans up its assets, prepares its balance sheet and property list, it shall formulate a liquidation plan and report it to the general meeting of shareholders or the people's court for confirmation.
The Company’s assets are paid separately for liquidation expenses, employees’ salaries, social insurance fees, and statutory compensation payments, taxes are owed, and the remaining assets after repayment of company debt are distributed by the company in proportion to the shares held by shareholders.
During liquidation, the company survived, but it was unable to carry out business activities unrelated to liquidation. The company's assets will not be allocated to shareholders until they are liquidated according to the provisions of the preceding paragraph.
Article 202 After the liquidation group discovers that the company’s assets are insufficient for the liquidation of debts after cleaning up the company’s assets, preparation of the balance sheet, and inventory of assets, it shall apply to the people’s court for the declaration of bankruptcy according to law.
After the company has been declared bankrupt by the People's Court, the liquidation team shall transfer the liquidation matters to the people's court.
Article 203 After liquidation of the company is completed, the liquidation group shall prepare a liquidation report, report it to the general meeting of shareholders or the people's court for confirmation, and submit it to the company registration authority, and apply for the cancellation of the company's registration, and announce the termination of the company.
Article 204 The members of the liquidation group shall be faithful to their duties and perform liquidation obligations according to law.
Members of the liquidation group shall not use their powers to accept bribes or other illegal income, nor may they infringe on the company's property.
If members of the liquidation group cause losses to the company or the creditors due to intentional or gross negligence, they shall be liable for compensation. Gold Leaf Charter
Article 205 Where a company is declared bankrupt according to law, bankruptcy liquidation shall be carried out in accordance with the law concerning the bankruptcy of relevant enterprises.