Tips on legal risks
An enterprise, if dissolved as per court order, should handle its liquidation in a timely manner. Should the enterprise be unable to handle the liquidation or do not organize its liquidation, the shareholders or directors should apply to the court for a forced liquidation to ensure its timely, smooth withdrawal from the market.
[Basic facts]
Company A fell into operation difficulties due to serious conflicts between shareholders. Company B, a shareholder, brought to the court a litigation for company dissolution, and the court, after first instance and second instance trials, ordered the dissolution of Company A. After dissolution, Company A failed to organize a liquidation, and Company B applied to the court for a forced liquidation.
[Rationale of the people’s court]
As the civil judgement in force has already ordered the dissolution of Company A, the company has failed to set up a liquidation committee within 15 days of the dissolution order, and Company B, a shareholder, has already applied to the court for a forced liquidation of Company A, the statutory acceptance conditions are met, and the court decided to accept Company B’s application for the forced liquidation of Company A. And Company A is now in forced liquidation.
[Tips on legal risks]
An enterprise survives on the harmonious coexistence of humans and funds, and the loss of either element will push the business into operation and management difficulties or even onto the brink of liquidation or forced liquidation. The enterprise should timely organize its liquidation, failing to do so, the shareholders or directors should timely apply to the people’s court for a forced liquidation to ensure a smooth withdrawal from the market, removing any unnecessary risk of legal responsibilities for the enterprise and its shareholders due to late liquidation.
