The Construction Of Insolvency Restructuring Procedures For Small And Micro Enterprises

The reorganization system can play a rescue function for enterprises in economic distress and still have business value,so that they can achieve business regeneration,which is of great significance for enterprise crisis relief.The current application of the restructuring process in China is mainly focused on large and medium-sized legal enterprises with a relatively sound governance structure,but there are also a wide range of unincorporated bodies and small legal enterprises in the economic market,which are classified as small and micro enterprises.Small and micro enterprises provide a large number of jobs and technological innovation and are of great importance to the development of the social economy,but due to their operational vulnerability,they can easily fall into operational crisis.Due to the provisions of the current insolvency regime,there are obstacles to the application of the reorganization system for small and micro enterprises,resulting in a low commencement rate and a low success rate of reorganization for small and micro enterprises in judicial practicCompared to the reorganization procedures for medium and large enterprises,the composition of the reorganization estate,the main participants and the way of reorganization are all unique to micro and small enterprises,which are characterised by a combination of ownership and control,and a mix of credit between the enterprise and the owner.The mismatch between the provisions of the current bankruptcy law and the needs of MSME restructuring is the main legal reason for the difficulties of small and micro enterprises restructuring,which is reflected in the following: the scope of application of restructuring procedures is limited: the current bankruptcy restructuring procedures are mainly applicable to legal entities,and there are institutional barriers to the application of restructuring procedures to unincorporated organizations and individual entrepreneurs;the conditions for initiating restructuring procedures are strict:the current bankruptcy law has strict rules on the reasons for and subjects of restructuring applications,which leads to the restriction of the application of restructuring procedures.Strict requirements for the commencement of reorganization proceedings: the current bankruptcy law’s strict rules on the reasons for and subjects of reorganization applications make it difficult or late to commence reorganization of Small and micro enterprises.The reorganization process is complex and lengthy: the current insolvency law does not allow for a quick and efficient reorganization process for Small and micro enterprises,which increases the cost of reorganization.The second part is the judicial application and exploration of the restructuring of micro and small enterprises.Through the investigation of the application status of small,medium and micro enterprises in practice,it is found that the practice of small and micro enterprises restructuring is insufficient.From the perspective of judicial practice and judicial norm practice,some courts flexibly apply the restructuring procedure,actively explore the practice of small and micro enterprises restructuring,and conduct case study and norm analysis.By examining the legislative experience of some overseas countries and organizations in the field of MSME restructuring,and taking into account China’s national conditions,the following four aspects should be taken into account in structuring the rules of small and micro enterprises restructuring procedures in China: clarifying the scope of small and micro enterprises restructuring procedures: taking the total amount of unsecured claims as the main basis,combining the number of creditors and the clarity of the debt-claim relationship with two conditions to determine the scope of small and micro enterprises restructuring,and covering the types of enterprises,including Optimising the mechanism for starting a restructuring of Small and micro enterprises: simplifying the examination of the causes of insolvency and the debtor’s disclosure obligations,giving eligible contributors the right to apply for restructuring,and encouraging Small and micro enterprises to start restructuring proceedings as early as possible;preserving the original capital contribution of Small and micro enterprises: establishing a preferential management system for debtors,preserving the original contributors’ right to control the operation of the enterprise,and adopting the The "expected disposable income rule" replaces the absolute priority rule;simplifying the restructuring process for Small and micro enterprises: simplifying the setting up of creditors’ meetings and adopting a "deemed approval mechanism" in the voting rules to shorten the period for small and micro enterprises restructuring.