It is known to many people that in China the procedures of enterprises deregistration are complex and time-consuming, we have experienced to take around two years to help one of our clients to close down the company properly. However with a new Guiding Opinion issued by the State Administration of Industry and Commerce (“SAIC”), it is expected that the procedures for enterprises deregistration in the future will be easier, according to new Guiding Opinion each level of local AIC are required to implement of these Opinions as of March 1, 2017
According to the new Guiding Opinion, the purposes of simplifying the company’s de-registration procedures are to enhance the efficiency of market exit mechanism and the utilization efficiency of social resources and reduce the exit costs of market players.
For these purpose, the Guiding Opinion listed the characteristics of enterprises that can choose to adopt with the easier procedures, which including the enterprises that have not carried out any business activities after obtaining a business license , or have no credit or debt or have settled all credits and debts before applying for deregistration and for those enterprise where a people’s court decides to conduct compulsory liquidation or declare bankruptcy of.
For the above mentioned companies which choose to apply for streamlined deregistration, it is no longer has to submit the liquidation report, investors’ resolution, tax clearance certificate, record-filing certificate of the liquidation group, sample newspaper in which the announcement is published and other materials, which will save a lot of time to whole process of de-registration.
However the Guiding Opinion is just a general direction for simplifying the procedures and each local AIC will issue specific rules to implement these Opinions as of March 1, 2017. If you want to learn more, just contact your lawyer to know more about the new rules after that.