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China Company Cancellation Procedures (FIE)

Updated:2018-5-21 16:51:49    Source:www.tannet-group.comViews:302

China company cancellation procedures (FIE) are no easier or shorter than the process of setting up such a company. Many foreign businesses in China do very well and are profitable. However, there will always be some that do not succeed commercially, or that may have to close because of external circumstances affecting their parent company overseas.

Process for Closing a foreign invested company in China
1. Resolutions of the shareholders' committee and the board of directors on the termination of the enterprise and liquidation. Meanwhile, the board appoints the members of the liquidation committee and establishes the liquidation committee;
2. The liquidation committee holds the resolution of the shareholders' meeting, the resolution of the board of directors and the liquidation application report, and sends the application to the original government organ that approves the establishment of the company. If the competent government office approves the application, it shall issue a reply document, and the official approval day of the government organ shall be the beginning date of the liquidation;
3. The liquidation committee shall entrust the accounting firm to carry out the audit of the accounting statements at the beginning of the liquidation date, and issue an audit report;
4. At least three liquidation announcements are published in the provincial newspapers within 60 days since the establishment of the liquidation committee. The announcement of the first liquidation shall be published within 10 days from the establishment of the liquidation committee. The creditors of the enterprises declare their claims to the liquidation committee within 90 days from the date of the first announcement;
5. During the liquidation period, the liquidation committee deals with the assets of the enterprise, handles the creditor's rights and debts of the enterprise, and conducts liquidation accounting according to the requirements of the liquidation accounting;
6. During the period of liquidation, the liquidation committee makes tax declaration on state and local taxes on time;
7. The liquidation committee prepare the Liquidation Balance Sheet, Liquidation Profit and Loss, Debt Settlement Statement, Property Allocation Table and Statement of Liquidation at the end of liquidation day, as well as audit report of accounting statements executed by entrusted accounting firm on liquidation end date.
8. Tax cancellation procedures. The liquidation committee shall apply for the cancellation of tax (state and local tax) with the above-mentioned statement, audit report and Cancellation Application form. According to the actual situation of the enterprise, the tax authorities decide whether to check the enterprise accounting data on the spot. After the enterprise pays back the tax payable, it will obtain the duty-paid proof and the cancellation certificate of tax registration issued by the tax authorities;
9. Cancellation procedures for registration of financial and statistical certificates;
10. Cancellation of bank deposit account;
11. Cancellation of business license and company seal, as well as the formalities for cancellation of business;
12. Hand in the Approval Certificate to the original government organ that approves the establishment of the enterprise.

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