According to the Opinions on Implementing Simplified Deregistration of Enterprises Nationwide (Gong Shang Qi Zhu Zi [2016] No. 253) the State Administration for Industry and Commerce circulated recently, simplified deregistration of enterprises will be implemented nationwide from March 1, 2017. 

Previously, simplified deregistration was implemented as a pilot reform from April 2015 in Ningbo, Shanghai (limited to the Pudong district), Shenzhen and Yancheng. However, it excluded foreign investment enterprises (“FIEs”) and enterprises that had been established for over three years. 

The nationwide implementation enables limited liability companies, non-corporate enterprise legal persons and partnerships that (i) have not conducted business activities since obtaining their business licenses, or (ii) have no pending claims and obligations, or settled them before applying for deregistration, to choose between the general deregistration procedure and the simplified one.

Companies limited by shares, as well as the following enterprises, are still excluded: 

- FIEs on the Negative List

- Enterprises on the list of abnormal operations, that seriously violate laws or have a credit loss

- Enterprises with frozen or pledged equity or mortgaged assets

- Enterprises under investigation or judicial assistance procedures, or which have received an administrative penalty

- Enterprises with non-deregistered branches

- Others, as the case may be

Enterprises applying for the simplified deregistration procedure must first publish a public announcement for 45 days through the enterprise information system (where annual reports are submitted) to allow for any objections. The registration authorities (the Administration for Industry and Commerce, or “AIC”) will pass on the deregistration information to the tax authorities, the human resources and social security authorities, and, in the case of FIEs, to the MOFCOM. If there is no objection within the 45-day period, the AIC will issue a decision on granting the simplified deregistration within three days.

Application documents include the application form, a commitment letter from all the investors, and the original and duplicate business license. Under the Opinions, no other documents are required (i.e., record filing of the liquidation team, investors’ resolution, liquidation report, tax clearance certificate or public newspaper announcement). 

It usually takes over a year for the AIC to fully deregister FIEs, with tax-related procedures taking more than six months. Having FIEs qualify for simplified procedures, together with the record filing reform implemented in October 2016, is a welcome additional measure that eases the extra burden on foreign investment. 

Date of issue: December 26, 2016. Effective date: December 26, 2016