Five departments issued ＂Guidelines for Enterprise Cancellation (revised in 2021)＂

　　According to the website of the General Administration of Market Supervision on the 29th, the General Administration of Market Supervision, the Ministry of Human Resources and Social Security, the Ministry of Commerce, the General Administration of Customs and the State Administration of Taxation issued the announcement of the Guidelines for Enterprise Cancellation (Revised in 2021). The full text is as follows:

　　Guidelines for Enterprise Cancellation (revised in 2021)

　　First, the basic procedures for enterprises to withdraw from the market

　　Usually, when an enterprise terminates its business activities and withdraws from the market, it needs to go through three main processes: resolution dissolution, liquidation distribution and cancellation of registration. Take a company as an example. According to the Company Law, before the company withdraws from the market and formally terminates, it must declare its dissolution, set up a liquidation team to carry out liquidation, clean up the company’s property, pay taxes, pay employees’ wages and social insurance fees, etc. After the liquidation, it should make a liquidation report, cancel the company registration and announce the company’s termination.

　　Second, dissolution

　　The dissolution of an enterprise is a legal act in which an enterprise stops its business activities and begins to enter liquidation procedures until it terminates its legal personality when there are legal reasons for dissolution.

　　(1) voluntary dissolution.Refers to the dissolution of the company based on the will of the enterprise or shareholders. Take the company as an example, including: the business term stipulated in the articles of association expires or other reasons for dissolution stipulated in the articles of association appear; The shareholders’ meeting or the shareholders’ meeting decides to dissolve; Dissolution due to merger or division of the company, etc. Among them, the resolution of the shareholders’ meeting of a limited liability company on the dissolution of the company must be passed by shareholders representing more than 2/3 of the voting rights; A resolution on the dissolution of the company at the shareholders’ meeting of a joint-stock company must be passed by more than 2/3 of the voting rights held by the shareholders present at the meeting. The dissolution of a wholly state-owned company must be decided by the state-owned assets supervision and administration institution; Among them, the dissolution of an important wholly state-owned company shall be audited by the state-owned assets supervision and administration institution and reported to the people’s government at the same level for approval.

　　(2) Compulsory dissolution.It refers to the dissolution based on the decision and order of the relevant government organs or the court’s ruling, which is not based on the company or shareholders’ own wishes. It is usually divided into administrative decision dissolution and judicial decision dissolution. Administrative decision to dissolve, the company is ordered to be dissolved by the administrative authority ex officio because its behavior violates laws and regulations and harms social public interests or public order, including its business license revoked, ordered to close down or revoked according to law. If the judicial decision is dissolved due to serious difficulties in the company’s operation and management, and the continued existence will cause great losses to shareholders’ interests, which cannot be solved by other means, the shareholders holding more than 10% of all shareholders’ voting rights of the company shall file a lawsuit to the people’s court to dissolve the company and request the people’s court to dissolve it.

　　Iii. liquidation

　　After the company makes a resolution of dissolution, it shall be liquidated. The important content of company liquidation is to clean up the company’s assets, settle all debts and end all existing legal relationships. The purpose of liquidation is to protect the interests of creditors, shareholders and public interests. Except for dissolution due to merger or division, the company shall be liquidated at the time of dissolution.

　　(1) Establish a liquidation group.The Company shall set up a liquidation group within 15 days from the date of dissolution, which shall be responsible for cleaning up the company’s property, creditor’s rights and debts. The liquidation group of a limited liability company is composed of shareholders of the company (if the shareholders of the company are legal persons, relevant personnel may be appointed to participate in the liquidation), and the liquidation group of a joint stock limited company is composed of directors or personnel determined by the shareholders’ meeting. If a liquidation group is not established for liquidation within the time limit, the creditor may apply to the people’s court to appoint relevant personnel to form a liquidation group for liquidation.

　　(2) Publish the information of the liquidation group and the creditors’ announcement.Within 10 days from the date of establishment of the liquidation group, the applicant shall announce the information of the liquidation group through the national enterprise credit information publicity system. At the same time, the liquidation group shall notify creditors within 10 days from the date of its establishment, and publish creditors’ announcements through newspapers within 60 days according to law, or publish creditors’ announcements to the society free of charge through the national enterprise credit information publicity system for 45 days.

　　(3) Carrying out liquidation activities.The liquidation group is responsible for clearing the company’s property and preparing the balance sheet and property list respectively; Handle the unfinished business of the company related to liquidation; Pay fines and penalties of administrative organs and judicial organs; Pay the taxes owed to the customs and tax authorities and the taxes generated in the liquidation process, and go through relevant procedures, including late payment fees, fines, payment of taxes that need to be paid in advance for the cancellation of customs supervision of goods with tax reduction or exemption, submission of relevant licenses that need to be reissued, cancellation and liquidation of enterprise income tax, settlement of land value-added tax, settlement of export tax refund (exemption), cancellation of invoices and tax control equipment, etc. Taxpayers who have tax-related violations shall accept punishment and pay fines; Clearing creditor’s rights and debts; Dispose of the company’s remaining property after paying off debts.

　　(4) distributing the company’s property;After clearing up the company’s property, preparing the balance sheet and property list, the liquidation group shall formulate the liquidation plan and report it to the shareholders’ meeting, shareholders’ meeting or the people’s court for confirmation. After paying the liquidation expenses, employees’ wages, social insurance fees and statutory compensation, paying the taxes owed and paying off the company’s debts, the remaining property of the company shall be distributed according to the proportion of shareholders’ capital contribution in a limited liability company and the proportion of shares held by shareholders in a joint stock limited company. During the liquidation period, the company shall survive, but shall not carry out business activities unrelated to liquidation. The company’s property shall not be distributed to shareholders before it is paid off in accordance with the provisions of the preceding paragraph.

　　(5) Making a liquidation report.After the liquidation, the liquidation group shall prepare a liquidation report, submit it to the shareholders’ meeting, the shareholders’ meeting or the people’s court for confirmation, and submit it to the company registration authority to apply for cancellation of company registration and announce the termination of the company.

　　Iv. cancellation of registration

　　(1) Ordinary cancellation process

　　The general cancellation process is applicable to all kinds of enterprises. After the liquidation, enterprises need to cancel tax registration, enterprise registration and social insurance registration respectively. Companies involved in customs declaration and other related businesses also need to handle matters such as filing and cancellation of customs declaration units.

　　1. Apply for cancellation of tax registration.

　　When a taxpayer applies to the tax department for cancellation, the tax department conducts a pre-inspection of tax cancellation to check whether the taxpayer has outstanding matters.

　　(1) If taxpayers who have not handled tax-related matters take the initiative to go to the tax authorities for tax clearance, the tax authorities can immediately issue tax clearance documents according to the business license provided by the taxpayers.

　　(2) Taxpayers who meet the conditions for immediate handling of vacancies, when handling tax cancellation, have complete information, and the tax authorities immediately issue tax clearance documents; If the information is not complete, the tax department can immediately issue a tax clearance document after making a promise. Taxpayers should complete the information and settle related matters according to the promised time limit. The specific tolerance conditions are:

　　(1) taxpayers who have handled tax-related matters but have not received invoices (including invoices issued on behalf of them), have no tax arrears (late fees) and fines, and take the initiative to go to the tax authorities for tax clearance;

　　② Taxpayers who are not in the state of tax inspection, do not owe taxes (late fees) and fines, have paid off special VAT invoices and tax control equipment, and meet one of the following circumstances:

　　● Taxpayers with tax credit rating of A and B;

　　● M-level taxpayers whose tax credit rating of the holding parent company is Grade A;

　　● Enterprises founded by the provincial people’s government to introduce talents or industry leaders recognized by industry associations at or above the provincial level;

　　● Regular fixed individual industrial and commercial households that are not included in the tax credit rating evaluation;

　　● Taxpayers who have not reached the VAT tax threshold.

　　(3) If the conditions for the immediate handling of the commitment system are not met (or if the conditions for the immediate handling of the commitment system are met, but the taxpayer is unwilling to commit), the tax department will issue a Notice of Tax Matters to the taxpayer (informing the taxpayer of the outstanding matters), and the taxpayer can apply for tax cancellation only after handling all the outstanding matters first.

　　(4) If the manager of an enterprise declared bankrupt by a ruling of the people’s court applies for tax cancellation with a ruling of the people’s court to terminate the bankruptcy procedure, the tax department will immediately issue a tax clearance document.

　　(5) Before the taxpayer handles the tax cancellation, it is not necessary to apply to the tax authorities for terminating the "Entrusted Deduction Agreement". After the tax authorities complete the tax cancellation, the entrusted deduction agreement will be automatically terminated.

　　2. Apply for cancellation of enterprise registration.The liquidation group shall submit an application for cancellation of registration, resolutions of shareholders’ meeting, liquidation report and tax clearance certificate to the registration authority to apply for cancellation of registration. If the registration authority and the tax authority have shared the enterprise tax clearing information, the enterprise does not need to submit paper tax clearing documents; Those who have received the original and duplicate of the paper business license shall return the original and duplicate of the business license. When a wholly state-owned company applies for cancellation of registration, it shall also submit the decision of the state-owned assets supervision and administration institution. Among them, the approval documents of the people’s government at the same level shall also be submitted for the important wholly state-owned companies identified by the State Council. When an enterprise with a branch applies for cancellation of registration, it shall also submit the certificate of cancellation of registration of the branch.

　　3. Apply for cancellation of social insurance registration.An enterprise shall, within 30 days from the date of cancellation of enterprise registration, submit an application for cancellation of social insurance registration and other relevant cancellation documents to the original social insurance registration institution, and go through the formalities for cancellation of social insurance registration. Before the cancellation of social insurance registration, the arrears of social insurance premiums shall be paid.

　　4. Apply for the record cancellation of the customs declaration unit.Enterprises involved in customs declaration-related business can submit applications for cancellation of customs declaration units to the customs through the "single window" of international trade (http://www.singlewindow.cn) and "internet plus Customs" (http://online.customs.gov.cn), or through the cancellation "one-net" service platform networked by the market supervision department and the customs. For taxpayers who have filed with the customs and have tax arrears (including late fees) and fines and other tax-related matters that have not been settled, they should apply to the market supervision department for cancellation of enterprise registration after the customs declaration unit has filed for cancellation.

　　(2) Simple cancellation process

　　1. Applicable objects

　　Market entities without creditor’s rights and debts or having paid off creditor’s rights and debts (except listed companies). When applying for simple cancellation of registration, market participants should not have debts such as unsettled liquidation expenses, employees’ wages, social insurance expenses, statutory compensation, and taxes payable (late fees and fines).

　　In any of the following circumstances, the simple cancellation procedure is not applicable to an enterprise: it involves a foreign-invested enterprise that implements special access management measures as stipulated by the state; Being included in the list of abnormal business operations of enterprises or the list of serious illegal and untrustworthy enterprises; The stock right (investment interest) is frozen, pledged or mortgaged by movable property; Being under investigation or taking administrative enforcement, judicial assistance or being given administrative punishment; The unincorporated branch of the enterprise has not gone through the cancellation of registration; The summary cancellation procedure has been terminated; Laws, administrative regulations or the State Council decisions require approval before cancellation of registration; Other circumstances that do not apply to the simple cancellation of registration of enterprises.

　　If an enterprise is "listed in the list of abnormal business operations", "its equity (investment interests) is frozen, pledged or mortgaged by movable property", and "the unincorporated branch of the enterprise has not cancelled its registration", it is not necessary to cancel the simple cancellation of registration. After the abnormal state disappears, it can apply for simple cancellation of registration through publicity again. If the letter and form of the letter of commitment are not standardized, the market supervision department will accept its simple cancellation application after the market subject makes corrections, and there is no need to re-publicize it.

　　Taxpayers who meet the conditions of simple cancellation by the market supervision department, have not handled tax-related matters, have handled tax-related matters but have not received invoices (including invoicing), have no tax arrears (late fees) and fines, and have no other tax-related matters that have not been settled, are exempted from going to the tax department for tax clearance certificates, and can directly apply to the market supervision department for simple cancellation.

　　2. Handling process

　　(1) Enterprises that meet the applicable conditions log in and cancel the "One Network" service platform or the column of "Simple Cancellation Announcement" of the national enterprise credit information publicity system actively announce to the public the information such as the proposed application for simple cancellation registration and the commitment of all investors, and the publicity period is 20 days.

　　(2) During the publicity period, relevant interested parties and relevant government departments can raise objections and briefly state the reasons through the function of "Objection Message" in the column of "Simple Cancellation Announcement" of the national enterprise credit information publicity system. After the publicity period, the publicity system will no longer accept objections.

　　(3) After the tax authorities obtain the information pushed by the market supervision department to apply for simple cancellation of registration through information sharing, they should check the tax information system to verify the relevant tax-related situation in accordance with the prescribed procedures and requirements, and the tax authorities will not raise any objection to taxpayers who are shown by the inquiry system as follows: First, taxpayers who have not handled tax-related matters; Second, taxpayers who have handled tax-related matters but have not received invoices (including invoices), have no tax arrears (late fees) and fines, and have no other tax-related matters that have not been settled; The third is the taxpayer who has completed the tax clearance procedures such as paying off the invoice and settling the tax payable at the time of inquiry.

　　(4) After the expiration of the publicity period, if there is no objection within the publicity period, the enterprise shall handle the simple cancellation of registration with the registration authority within 20 days from the date of the expiration of the publicity period. If it is not handled at the expiration date, the registration authority may extend the time limit according to the actual situation, and the maximum extension period shall not exceed 30 days. After publicity, enterprises shall not engage in production and business activities unrelated to cancellation.

　　3. Simple cancellation of individual industrial and commercial households

　　Individual industrial and commercial households registered after the implementation of the "integration of two certificates" reform of business license and tax registration certificate need not submit a letter of commitment or publicize it if they cancel their registration through summary procedures. After the individual industrial and commercial households submit the application for simple cancellation of registration, the market supervision department shall, within one working day, push the relevant information about the individual industrial and commercial households’ application for simple cancellation of registration to the tax authorities at the same level through the provincial unified credit information sharing and exchange platform, government information platform and inter-departmental data interface (collectively referred to as the information sharing and exchange platform), and the tax authorities will give feedback on whether they agree to simple cancellation within 10 days. If there is no objection to the tax authorities, the market supervision department shall handle the simple cancellation of registration in time. For details, please refer to the Notice of State Taxation Administration of The People’s Republic of China, General Administration of Market Supervision on Further Improving the Simple Cancellation Registration and Convenient Market Exit of Small and Medium-sized Enterprises (Guo Shi Jian Zhu Fa [2021] No.45).

　　V. Guidelines for handling special circumstances

　　(1) There are problems such as shareholders’ loss of contact and non-cooperation.If it is difficult to cancel the limited liability company due to the loss of shareholders’ association or non-cooperation, all shareholders shall be notified in writing and in newspapers (or the national enterprise credit information publicity system), and a shareholders’ meeting shall be held to form a resolution in accordance with the voting ratio stipulated by laws and articles of association, and a liquidation group shall be established, and then an application for cancellation of registration shall be made to the enterprise registration authority.

　　(2) There is a problem that enterprises cannot organize liquidation by themselves.For a company that has been dissolved, but the investors with liquidation obligations refuse to perform the liquidation obligations or cannot set up a liquidation group for liquidation due to the inability to get in touch, the relevant shareholders or creditors may apply to the people’s court to appoint relevant personnel to form a liquidation group for liquidation in accordance with the provisions of the Company Law. After clearing up the company’s assets, compiling the balance sheet and list of assets, the liquidation group finds that the company’s assets are insufficient to pay off debts, and shall apply to the people’s court for bankruptcy according to law. If the people’s court ruled that compulsory liquidation or bankruptcy was declared, the enterprise liquidation group and the bankruptcy administrator may directly apply to the registration authority for cancellation of registration with the ruling of the people’s court to terminate the compulsory liquidation procedure or the bankruptcy procedure.

　　(3) The business license and official seal are lost.For enterprises that have lost their business licenses, they can apply to the enterprise registration authority for cancellation with the announcement of the loss of licenses publicized by themselves in the national enterprise credit information publicity system, without applying for a new business license. Where the official seal is lost, it shall be signed and sealed by all shareholders or signed and confirmed by the person in charge of the liquidation group. For an unincorporated enterprise as a legal person, the legal representative of the superior competent unit shall sign and affix the official seal of the superior competent unit for confirmation, and the relevant cancellation materials may not be affixed with the official seal.

　　(4) The shareholder (investor) has been cancelled.For an enterprise whose shareholders (investors) have cancelled but failed to clean up the foreign investment, and the invested enterprise cannot cancel, if its shareholders (investors) have a superior competent unit, the superior competent unit of the cancelled enterprise shall handle the relevant cancellation procedures in accordance with the regulations; If the cancelled enterprise has a legal successor, the successor may apply for it in accordance with the relevant provisions; If the cancelled enterprise has no legal successor, the shareholder (investor) registered at the time of cancellation of the cancelled enterprise shall apply for handling.

　　(5) Other issues.

　　1. For enterprises whose business licenses loaded with unified social credit codes have been revoked without replacement, the market supervision department has assigned codes to such enterprises, and enterprises can use their unified social credit codes to handle cancellation business in relevant departments without replacing their business licenses loaded with unified social credit codes.

　　2. A taxpayer whose business license is revoked by the registration authority or whose registration is revoked by other authorities shall, within 15 days from the date when the business license is revoked or its registration is revoked, apply to the original tax registration authority for tax cancellation.

　　3. Before going through the tax cancellation, taxpayers in abnormal tax state need to remove the abnormal state and go through the tax declaration formalities. In case of any of the following circumstances, the tax authorities may print the corresponding tax types and the relevant additional Confirmation Form for Batch Zero Declaration, which will be processed in batches after being confirmed by taxpayers:

　　(1) During the abnormal state, the value-added tax, consumption tax and related additional declarations that need to be reissued are all zero declarations;

　　(2) During the abnormal state, the monthly (quarterly) advance payment of enterprise income tax required to be reissued is zero, and there is no situation to make up for the previous losses.

　　VI. Prompt for Cancellation of Legal Liability

　　(1) When the company is liquidated, the liquidation group fails to perform the obligation of notification and announcement in accordance with the regulations, resulting in creditors’ failure to declare their claims in time and not being paid off, and the members of the liquidation group shall be liable for the losses caused thereby. (According to Article 11 of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC))

　　(2) If the liquidation group’s execution of unconfirmed liquidation plan causes losses to the company or creditors, and the company, shareholders or creditors claim that the members of the liquidation group shall be liable for compensation, the people’s court shall support it according to law. (According to Article 15 of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC))

　　(3) If the shareholders of a limited liability company, the directors and controlling shareholders of a joint stock limited company fail to set up a liquidation group to start liquidation within the statutory time limit, resulting in the depreciation, loss, damage or loss of the company’s property, and the creditors claim that they are liable for the company’s debts within the scope of losses, the people’s court shall support them according to law. (According to the provisions of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC) (II), Paragraph 1 of Article 18)

　　(4) If the shareholders of a limited liability company, directors and controlling shareholders of a joint stock limited company fail to perform their obligations, resulting in the loss of the company’s main property, account books, important documents, etc., and the creditors claim that they are jointly and severally liable for the company’s debts, the people’s court shall support them according to law. (According to the provisions of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC) (II), Paragraph 2 of Article 18)

　　(5) If the shareholders of a limited liability company, the directors and controlling shareholders of a joint stock limited company and the actual controller of the company maliciously dispose of the company’s property after the dissolution of the company, causing losses to creditors, or defrauding the company registration authority to cancel the registration of a legal person with a false liquidation report without liquidation according to law, and the creditors claim that they should bear corresponding liability for compensation for the company’s debts, the people’s court shall support them according to law. (According to Article 19 of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC))

　　(6) The company shall apply for cancellation of registration after liquidation according to law. If the company cancels its registration without liquidation, which makes it impossible for the company to liquidate, and the creditors claim that the shareholders of a limited liability company, the directors and controlling shareholders of a joint stock limited company, and the actual controller of the company shall be liable for paying off the debts of the company, the people’s court shall support it according to law. (According to the provisions of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC) (II), Paragraph 1 of Article 20)

　　(7) If the company goes through the cancellation of registration without liquidation according to law, and the shareholders or the third party promise to be liable for the company’s debts when the company registration authority goes through the cancellation of registration, and the creditors claim that they should bear corresponding civil liabilities for the company’s debts, the people’s court shall support them according to law. (According to the provisions of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC) (II), Paragraph 2 of Article 20)

　　(8) When the company’s property is insufficient to pay off the debts, if the creditors claim that the shareholders who have not paid their capital contributions, and other shareholders or promoters at the time of the establishment of the company shall bear joint and several liabilities for paying off the debts of the company within the scope of unpaid capital contributions, the people’s court shall support them according to law. (According to the provisions of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC) (II), Paragraph 2 of Article 22)

　　(9) If a member of the liquidation group violates laws, administrative regulations or the company’s articles of association and causes losses to the company or creditors, the people’s court shall support him according to law. (According to the provisions of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of People’s Republic of China (PRC) (II), Paragraph 1 of Article 23)

　　(10) If an enterprise conceals the real situation or practices fraud in the cancellation of registration, the registration authority may cancel the cancellation of registration according to law, and at the same time, the enterprise will be included in the list of enterprises that are seriously illegal and untrustworthy, and will be publicized through the national enterprise credit information publicity system. Relevant interested parties can claim their corresponding rights through civil litigation. (According to Article 64 of the Regulations on the Administration of Company Registration and Article 10, paragraph 2, of the Measures for the Administration of the List of Serious Violations and Dishonesty in Market Supervision and Management)

　　(eleven) the taxpayer fails to declare the cancellation of tax within the prescribed time limit, and the tax authorities shall order it to make corrections within a time limit and may impose a fine of less than two thousand yuan; If the circumstances are serious, a fine of not less than two thousand yuan but not more than ten thousand yuan shall be imposed. (According to Paragraph 1 of Article 60 of the Law on the Administration of Tax Collection)

　　(12) A taxpayer who forges, alters, conceals or destroys account books and vouchers without authorization, or overstretches expenditures or omits or understates income in account books, or refuses to declare or makes false tax returns after being notified by the tax authorities, and fails to pay or underpays the tax payable, is tax evasion. If a taxpayer evades taxes, the tax authorities shall recover the taxes and late fees that he fails to pay or underpays, and impose a fine of not less than 50% but not more than five times the taxes that he fails to pay or underpays; If a crime is constituted, criminal responsibility shall be investigated according to law. (According to the first paragraph of Article 63 of the Law on the Administration of Tax Collection)