China Simplifies Company Deregistration Procedures
On January 18, 2019, the State Administration for Market Regulation of China (previously named as SAIC), together with other four government departments jointly issued “Notice on Facilitating Enterprise Deregistration Work”, aiming to solve the problem of "difficult deregistration" confronted by enterprises. Below are the key points of this notice.
1. Strengthening information sharing and business collaboration
Enterprise deregistration online service special zone is to be established on the integrated e-government affairs service platform to achieve the goal of "information sharing and synchronous guidance" by all registration departments. After the enterprise publishes deregistration announcement through the national enterprise credit information publicity system, it will be informed by the relevant departments through the platform of their respective procedures, methods and approval results, so that the enterprise can monitor the process, progress and approval results of each deregistration step through "one network", and improve the efficiency of deregistration. It is expected that the enterprise deregistration online service special zone will be established and the goal of “one network” service shall be achieved before September 1, 2019.
2. Reform of the enterprise deregistration system
Requirement for filing of liquidation group record with the registration authorities is to be abolished. Enterprises will soon be able to gazette the liquidation group related information through the national enterprise credit information publicity system. In the meantime, the system will allow enterprises to make free announcements instead of publishing the deregistration announcements on the national newspaper, so as to lower deregistration cost of the enterprises.
3. Implementing tax deregistration classification
Eligible taxpayers, such as enterprises who haven’t handled tax-related matters, are exempted from going through the tax clearance procedures with tax authorities and can apply directly with the Administration for Market Regulation for simple deregistration. Qualified taxpayers, such as enterprises with tax payment credit ratings of Level A and Level B, can adopt the "commitment system" to deal with the shortage of deregistration materials after the tax deregistration immediate service is optimized.
4. Optimizing the procedures of social security, commerce and customs deregistration
For enterprises with no social security overdue payment, the Human Resources and Social Security Department shall simultaneously handle the social security deregistration according to the deregistration information shared by the integrated e-government affairs service platform. The commercial department plans to further optimize the process and streamline the materials when handling the related business of early dissolution of foreign-invested enterprises. The customs shall, in accordance with the law, take the initiative to cancel the record registration after going through various customs formalities.
5. Formulating solutions and increasing administrative guidance
For enterprises who have lost contact with their shareholders or lost business license and cannot apply for deregistration, relevant government departments shall formulate deregistration solutions and solve the substantive difficulties confronted by these enterprises.
6. Strengthening credit management and improving the system of joint punishment.
Where an enterprise conceals the true situation or practices fraud in the deregistration, the Administration for Market Regulation shall, in accordance with the law, list it on the list of enterprises that have seriously violated laws and broken promises, and publicize it through the national enterprise credit information publicity system. For enterprises that handle tax deregistration in the form of "commitment system" but fail to complete tax-related matters within the promised time limit, the tax authorities shall record the dishonest behaviour into the personal credit records of their legal representatives and chief finance officers.
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