Enterprise Bankruptcy Law of China Ⅰ

Order of the President of the People's Republic of China No.54

The Enterprise Bankruptcy Law of the People's Republic of China, adopted at the 23rd Meeting of the Standing Committee of the Tenth National People's Congress of the People's Republic of China on August 27, 2006, is hereby promulgated and shall go into effect as of June 1, 2007.

Hu Jintao
President of the People's Republic of China

August 27, 2006

Enterprise Bankruptcy Law of the People's Republic of China

（Adopted at the 23rd Meeting of the Standing Committee of the Tenth National People's Congress on August 27, 2006）

Contents

Chapter I General Provisions

Chapter II Application and Acceptance

Section 1 Application

Section 2 Acceptance

Chapter III Administrator

Chapter IV A Debtor's Property

Chapter V Expenses for Bankruptcy Proceedings and Debts Incurred for the Common Good of Creditors

Chapter VI Declaration of Claims

Chapter VII Creditors' Meeting

Section 1 General Provisions

Section 2 The Creditors' Committee

Chapter VIII Reorganization

Section 1 Application for and Period of Reorganization@@page@@

Section 2 Formulation of and Approval for a Reorganization Plan

Section 3 Implementation of a Reorganization Plan

Chapter IX Compromise

Chapter X Bankruptcy Liquidation

Section 1 Bankruptcy Declaration

Section 2Realization and Distribution

Section 3 Termination of the Procedure for Bankruptcy

Chapter XI Legal Liability

Chapter XII Supplementary Provisions

Chapter I

General Provisions

Article 1 This Law is enacted with a view to regulating the procedure for enterprise bankruptcy, fairly settling claims and debts, safeguarding the lawful rights and interests of creditors and debtors, and maintaining the order of the socialist market economy.

Article 2 Where an enterprise legal person cannot pay off his debts due and his assets are not enough for paying off all the debts, or he apparently lacks the ability to pay off his debts, the debts shall be liquidated according to the provisions of this Law.

Where an enterprise legal person is under the circumstances as specified in the preceding paragraph or he has apparently forfeited the ability to pay off his debts, he may undergo reorganization according to the provisions of this Law.

Article 3 A bankruptcy case shall be under the jurisdiction of the people's court at the place where the debtor resides.

Article 4 Where there are no provisions in this Law to govern the procedure for hearing a bankruptcy case, the relevant provisions of the Civil Procedure Law shall be applicable.

Article 5 Once the procedure for bankruptcy are initiated according to this Law, it shall come into effect in respect of the debtor's property outside of the territory of the People's Republic of China.

Where a legally effective judgment or ruling made on a bankruptcy case by a court of another country involves a debtor's property within the territory of the People's Republic of China and the said court applies with or requests the people's court to recognize and enforce it, the people's court shall, according to the relevant international treaties that China has concluded or acceded to or on the basis of the principle of reciprocity, conduct examination thereof and, when believing that the said judgment or ruling does not violate the basic principles of the laws of the People's Republic of China, does not jeopardize the sovereignty and security of the State or public interests, does not undermine the legitimate rights and interests of the creditors within the territory of the People's Republic of China, decide to recognize and enforce the judgement or ruling.

Article 6 When trying a bankruptcy case, the people's court shall, in accordance with law, guarantee the legitimate rights and interests of the employees of the enterprise and investigate the business managers of the bankruptcy enterprise for their legal liabilities.