Legal analysis: Company liquidation refers to the legal act of clearing, disposing and distributing the company's property and creditor's rights and debts in accordance with legal procedures when the company is dissolved, so as to end the existing property and other legal relations, thus ending its creditor's rights and debts, thus depriving the company of its legal person status. Except for dissolution due to merger or division, liquidation procedures must be handled for dissolution due to other reasons.

Legal basis: Article 187 of the Company Law of People's Republic of China (PRC). After clearing up the company's assets, compiling the balance sheet and list of assets, the liquidation group finds that the company's assets are insufficient to pay off debts, and shall apply to the people's court for bankruptcy according to law. After the company is declared bankrupt by the people's court, the liquidation group shall hand over the liquidation affairs to the people's court.