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China Company Deregistration Process (FIE)

Updated:2018-5-21 17:17:47    Source:www.tannet-group.comViews:367

China company deregistration process (FIPE) needs to go through several steps. Company deregistration, or closing down a company requires both time and cost and simply walking away might seemingly save the investor these expenses in the short term. However, for investors with a future perspective on doing business in China or looking to close potentially significant liabilities, deregistering properly will pay off in the long term.

Under the simplified deregistration procedure, the “commitment letter of all investors” , which covers information such as the investor’s decision, liquidation report, and other related documents, will serve as the key application document and basis for the AIC’s administration and supervision. The following documents are required by the AIC for the deregistration procedure of FIEs:

(1) The application letter for deregistration;
(2) The power of attorney to agent;
(3) Certificate for approval of deregistration by administrative authorities;
(4) The resolution or decision made by the company according to the Company Law; or the ruling on bankruptcy and the adjudication document on dissolution made by the People’s Court; or documents of the administrative institution on company closure.

Previously, on top of these documents, a liquidation report and the sample of the publicized announcement, certificate of branch deregistration, tax clearance certificate, business license (original and duplicate copy), and other related documents were required to complete the application process.

Applicable scope of the simplified deregistration procedure
Companies legally registered as either a limited liability company, non-corporate legal person, sole proprietorship, or partnership enterprise that had not started operation after obtaining a business license, or had started operation but already settled all of their claims and obligations, can now apply to the local AIC for the simplified deregistration procedure.

Companies under the following circumstances are not qualified for the simplified procedure:
1. FIEs involved in special administration measures (industries on the negative list) as stipulated by the state;
2. Those recorded on the list of enterprises with abnormal operation, or list of enterprises which have committed serious violations;
3. Entities whose equity (investment rights and interests) are frozen or pledged, or its assets are mortgaged, etc.;
4. Those under investigation, compulsory administrative measure, judicial assistance, or administrative penalty, etc.;
5. Non-legal person branches of the company that have not yet been deregistered;
Those who have previously been ordered to terminate the simplified deregistration procedure; and
6. Those requiring approval before deregistration according to laws, regulations, and the State Council’s decisions.

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