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Guangzhou Company Cancellation

Updated:2018-1-15 16:19:59    Source:www.tannet-group.comViews:75

Guangzhou company cancellation does not always occur for negative reasons such as bankruptcy. A company may also seriously consider liquidation for strategic reasons. For company deregistration, the company must file an application with related government department. Owners should follow all the other steps to proper company dissolution.

Motives resulting in company cancellation
• A resolution for dissolution is made at a meeting of a company’s shareholders.
• A company is absorbed in a merger or has been separated from the controlling entity.
• Expiration of business operations.
• The business license has been revoked by the government/an order for closure has been issued or the business license has been ordered-to-be-closed or canceled by the government in the public’s best interests due to determined legal violations.
• A company undergoes financial difficulties and can not anticipate transforming the business to deliver future profitability.
• Force Majeure such as fire, natural disaster, warfare or changes in government regulations etc. enforce the liquidation of the company.
• A company decides to relocate all or a division out of China to another country, to take advantage of: cheaper labour, a more relevantly skilled talent pool, a more supportive political environment etc. This may necessitate the company to liquidate all of their assets in China.

Deregistering a Company in Guangzhou
In China, the procedure for company deregistration is rather complicated, particularly concerning compliance to China Customs and the Tax Authority. In general the process can take between one year and two years depending on the complexity of your enterprise.

After the deregistration process with the local and state administration, the final distribution of funds and closing of bank accounts can begin. Depending on the number of bank accounts existing in China and any remaining balance, the timing for this stage can vary significantly.

1. Pre-authorization
• Shareholders decide to liquidate Company;
• Company selects a firm to assist with the process;
• Preparation of related documentation;
• Application for liquidation with the Bureau of Commerce ("BOC") and Administration of Industry & Commerce ("AIC");
• Formation of a Liquidation Commitee;
• Pre-Liquidation Audit and compliance work completed.

2. Post-authorization
• Public announcement issued in local newspapers;
• Employees should be laid off;
• Valuation and sale of company assets;
• Creditors paid off;
• Final Audit conducted.

3. Deregistration
• Businesses trading, importing/exporting across borders must deregister from China Customs;
• Deregistration from the local governing Tax Authority;
• Destruction of company chops and seals.

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