After 12 years of talk, the Standing Committee of the National People’s Congress finally enacted the corporate bankruptcy law on Sunday (according to a report by MarketWatch):
“The measure modernizes a 1986 bankruptcy law that applied to state-owned enterprises. It’s seen as an attempt to provide a more relevant legal structure to China’s increasingly market-driven economy. ‘The current bankruptcy rules … are widely regarded as outdated as they fail to give sufficient protection to creditors and only touch on state-owned enterprises’, the official Xinhua news agency said.”
The new law covers state and private enterprises, and puts creditors’ interests ahead of employees.
China Prof Law Blog notes a Chinese source for text of the new law, while also pointing to the new Partnership Enterprise Law. More news on both can be expected soon. Both laws are reported to be effective from June 1, 2007.
See news sources:
China lifts creditors’ status in new bankruptcy law
MarketWatch – USA
HONG KONG (MarketWatch) — China passed on Sunday an updated bankruptcy law that elevates private creditors to the front of the line in the event of insolvency …
China enacts new bankruptcy law
BBC News – UK
China has passed a new bankruptcy law that will address not only state but also private firms for the first time. The Corporate …
Revised Bankruptcy Law and Partnership Law adoptedChina law prof Blog