萬國法律事務所

A study of the Corporate Reorganization and Bankruptcy Act has been completed at the urging of Taiwan’s Council for Economic Planning and Development and Judicial Yuan. The Council and the Judicial Yuan have now decided that the Ministry of Economic Affairs should supervise the Act.

The Judicial Yuan has explained that because corporate reorganizations and bankruptcies are integrally related, ideally the procedures for both should be contained within a single legal code. Moreover, due to the nature of the matters that the Act will cover and regulate, it is proper and logical for the most relevant administrative agency, in this case, the Ministry of Economic Affairs, supervise and guide the legislation.

The drafting of the Corporate Reorganization and Bankruptcy Act will involve substantive revisions of Taiwan’s Company Law and its current Bankruptcy Law. The existing Bankruptcy Law will be retained. However, it will apply only to personal bankruptcies rather than corporate bankruptcies after the Corporate Reorganization and Bankruptcy Act is completed and promulgated. The Ministry of Economic Affairs will establish a body to supervise the legislative preparations related to the drafting of the new Act. The Judicial Yuan will cooperate with this body in connection with the legislative work and will consult and assist where and when necessary.

The Council for Economic Planning and Development expects that the Corporate Reorganization and Bankruptcy Act, when enacted, will reduce and simplify the lengthy and complicated process that reorganizations and bankruptcies currently undergo. Taiwan’s draft of the Act borrows and imitates the United States federal bankruptcy system, which includes both reorganization and bankruptcy procedures under a single legal code. As such, an entity that files for reorganization or bankruptcy may select initially either reorganization or bankruptcy, but, subsequently, the entity may switch to the other. Finally. Under this new system, the courts will conduct a one-time disposition of the filer’s debts, unless there are provisions disallowing the same.