Beijing company deregistration is relatively a complex and challenging process, therefore professional advice and guidance should be sought when researching company liquidation. Beyond the financial challenges presented by liquidation in China, China tax laws, China labour laws and bureaucracy need to be navigated through. This means that compared to business practices in more legally robust markets, the process is not quite as simple as closing down an office, stores or factories.
Reasons for Liquidating a Company in Beijing
It is important to keep in mind that liquidation does not always occur for negative reasons such as bankruptcy. A company may also seriously consider liquidation for strategic reasons. Motives could include the following:
• 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•The business license has been revoked by the government / an order for closure has been issued or the business license has been ordered-to-be-closed or cancelled by the government in the public’s best interests due to determined legal violations (such as negative environmental impact or catastrophic malpractice).
• A company undergoes financial difficulties and cannot 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.
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Procedures for Company Deregistration in Beijing
1. Pre-authorisation
• 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-authorisation
• Public announcement issued in local newspapers;
• Employees should be laid off (although certain key roles can be retained to assist with the liquidation;
• Valuation and sale of company assets;
• Creditors paid off;
• Final Audit conducted (including all liquidation transactions).
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.
Contact Us
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Email: beijing.tannet@qq.com
Website: http://english.tannet-group.com/
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