Terminating a company in Chengdu may happen due to various reasons. For some small business owners, the time comes when they must end operations and dissolve their business. It’s a stressful time and a multi-step process. Beyond the financial challenges presented by liquidation of a business, China has a number of regulations, tax laws, and labor laws and bureaucracy to navigate through the process of liquidation and compared to business practices in more legal robust markets, the process in not quite as simple as closing the stores or factories. Company cancellation in China generally goes through three key steps, namely, dissolution, liquidation and deregistration.
When to apply for Company Dissolution
All company dissolution should be comply with the requirements of laws and regulations of PRC’s Company Law and PRC’s Company Registration Administration Ordinance.
The company was declared bankrupt in accordance with the law.
The Term of Operation prescribed in the Articles of Association or other dissolution events prescribed by the Articles of Association shall appear.
Shareholder’s Meeting or the sole shareholder of the one-person liability limited company decide to dissolve.
The business license shall be revoked in accordance with the law, and the company shall be ordered to close or be revoked.
The People’s Court demands the close of business.
Dissolution is required for the merger or division of the company.
Other circumstances stipulated by laws and administrative regulations.
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Why to Process Company Liquidation
In order to terminate existing property and other legal relations, the company shall, in accordance with the legal procedures, clear, dispose and allocate the company's property and creditor's rights and debts. Apart from dissolution of the company due to merger or division, the dissolution of the other causes shall be through the liquidation procedure.
The scope of the liquidation of the company shall be the examination of the company's capital contribution, assets, claims and debts. The purpose of the liquidation is to eliminate the rights and obligations arising between the company and other social subjects, thus providing a reasonable basis for the termination of the company.
How to proceed Company Deregistration
1. To Clear social security expenses and accounts in Social Security Bureau;
2. To clear unpaid taxes and charges in Tax Bureau;
3. Announcement on the major newspaper media to declare the cancellation;
4. Cancellation of the record and the business license;
5. Cancellation of corporate accounts;
6. Deregistration of other industrial licenses and qualifications;
7. Nullify the legal effect of the company seal;
8. Other necessary deregistration procedures.
Alternatives to company deregistration
Because of the procedures and costs involved, business owners might be wondering whether there is an alternative. Besides terminating a company, you may also consider transfer. Many business owners don’t have a succession plan in place. Some are reluctant to take time away from running their business, while others find the prospect daunting on both a logistical and psychological level. But don’t put it off. Experts agree that advance planning for a business transfer is a key aspect of sound management.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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