Pursuant to the Guiding Opinions on Comprehensively Advancing the Reform of Simplified Deregistration of Enterprises issued by the State Administration for Industry and Commerce( AIC) at the end of 2016, a new set of simplified deregistration procedures has been implemented nationwide since 2017.
Applicable Enterprises
It should be noted that the simplified deregistration procedures ONLY apply to the following enterprises which:
- have never conducted operating activities after obtaining business license (no operation), and
- have no debts or credits, or have already settled all the debts and credits before deregistration application (no debts or credits).
The local AICs will review the Enterprise Deregistration Application Form and the Undertaking Letter of Investors for a formality examination, and determine if a company meets the above conditions.
Some enterprises are not allowed to file deregistration under the simplified deregistration procedures, including those in the lists with abnormal operations, those in the lists with serious illegal and unfaithful acts, those with equity frozen, pledged or with moveable properties mortgaged (registered in the System), those involved in administrative punishments (registered in the System), those with their branches not property deregistered (registered in the System), or those with their simplified deregistration terminated.
Application Procedures
Step 1: The enterprise files a simplified deregistration public announcement in the Public System
Step 2: The enterprise issues the public announcement and waits for objections
The public announcement period is 45 calendar days. Any natural person, enterprise or other relevant department may propose objections to the simplified deregistration announcement within 45 days.
After an enterprise issues a simplified deregistration announcement, AIC will forward the proposed information to the tax department through the government information share and exchange platform. The tax department shall investigate the tax information system to verify the enterprise’s tax payments status based on prescribed procedures and requirements, and will raise its objection to AIC for enterprises with pending tax issues before the day following the expiry of the public announcement period.
Step 3: The enterprise applies for simplified deregistration
When the public announcement period is over, the enterprise shall submit its simplified deregistration application with AIC within 30 calendar days. AIC will conduct a documentary review for the application, and grant the approval for simplified deregistration according to law within 3 working days for the enterprise with qualified documents and no objection raised within the public announcement period.
Application Documents
An enterprise applicable simplified deregistration procedures only needs to submit to the AIC the original application letter, power of attorney, undertaking letter of all investors and business license. There is no need to submit the liquidation report, investor resolution, tax clearance certificate, liquidation committee recordal certificate, newspaper with the published deregistration announcement and other materials.
Legal Responsibilities
Enterprises that wish to apply for simplified procedures shall ensure that they have not operated or incurred any debts or credits, or have already settled their debts and credits. If an enterprise conceals the truth or commits fraud during the simplified deregistration, the registration authority may rescind the deregistration according to law, and put such enterprise into the list of enterprises with serious illegal and unfaithful acts. In case of any malicious use of the simplified deregistration procedures for evading debts or damaging others’ lawful rights, the relevant parties may claim investors for corresponding civil liabilities through civil procedures.