Don’t just walk away
A company that stops filing doesn’t disappear. It’s moved to the abnormal operations list, then the list of seriously dishonest enterprises, and eventually its licence is revoked. Each step affects the legal representative and shareholders personally: credit restrictions, travel restrictions, and being barred from serving as a director or legal representative of other Chinese companies. A proper closure costs less than these consequences.
Option 1: simplified deregistration (简易注销)
This is available to companies that have no unpaid debts (including employee wages, social insurance and taxes) and haven’t started trading or have settled everything. It isn’t available if the company is on the abnormal operations list, is under investigation, or has assets frozen.
- Public notice: announce the planned closure on the National Enterprise Credit Information Publicity System for 20 days.
- Shareholder commitment: all shareholders sign a commitment that debts are settled. They remain personally liable if this later proves untrue.
- Tax: clear any outstanding tax. Low-risk companies can get a quick tax clearance.
- SAMR deregistration once the notice period ends without objection.
The whole process usually takes one to three months.
Option 2: general deregistration with liquidation
- Resolution to dissolve by the shareholders.
- Liquidation group formed within 15 days. Under the 2024 Company Law the directors are responsible for liquidating the company and can be liable for losses if they delay.
- Creditor notice: notify known creditors within 10 days and publish an announcement within 60 days. Creditors declare their claims within 30 days of a notice, or 45 days of the announcement.
- Liquidation: collect receivables, sell assets, settle employees (severance), taxes and debts in the statutory order, and prepare the liquidation report.
- Tax deregistration: a final audit and tax inspection. The tax bureau may review several years of filings, and this is usually the longest step.
- Other authorities: social insurance and the housing fund, customs (for importers and exporters), and foreign exchange.
- SAMR deregistration, then bank account closure after the remaining funds are repatriated.
This takes six to twelve months, often longer for companies with a complex tax history.
Alternatives to closing
- Sell the company. An equity transfer to a buyer or a local partner can be quicker and recover some value.
- Merge it into another group company.
- Reduce its size. Cut capital and costs, and keep it as a minimal entity if you might return.
Getting money out
Remaining cash goes to the shareholders after debts are paid. Tax on any liquidation gain must be settled, and the bank needs the tax clearance before it remits funds abroad.
Our deregistration service takes companies through either route. We often start with a health check of the company’s tax and filing record, because problems there decide the timeline.