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Simplified Deregistration Reform Fully Underway on 1 March

Pursuant to the Guiding Opinions on Comprehensively Advancing the Reform of Simplified Deregistration of Enterprises released at the end of 2016 (see full text in Chinese), the reform of simplified enterprise deregistration was kicked off nationwide on 1 March 2017 in an effort to streamline the market exit procedures.

Pilot reforms for simplified enterprise deregistration were launched in some provinces a while ago. For example, the Zhejiang Provincial Administration for Industry and Commerce promoted the simplified deregistration of enterprises in 2016 and greatly shortened the time needed for deregistration. The Jilin Provincial Administration for Industry and Commerce also tried out simplified deregistration in the four cities of Changchun, Jilin, Siping and Songyuan and succeeded in shortening deregistration processing time by 77.8% on average by the end of last year.

Qualified enterprises may choose to use ordinary or simplified deregistration procedures. The qualifications include not having undertaken any business operation after obtaining their business licence and having already settled all their claims/receivables and all obligations towards other parties before applying for deregistration. In terms of company type, qualified enterprises include limited liability companies, non-corporate legal persons, sole proprietorship businesses and partnership businesses.

Enterprises opting for simplified deregistration procedures must make a public announcement through the National Enterprise Credit Information Disclosure System. The registration organs will forward the relevant details of enterprises intending to apply for deregistration to the tax, human resources and social security departments at the same level via the National Enterprise Credit Information Disclosure System. Enterprises involving foreign investment also need to forward these details to the competent department of commerce at the same level.

Content provided by Picture: HKTDC Research
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