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Close Company
Foreign investors decided to close their Chinese companies for a variety of reasons. Sometimes, A company closure due to profit loss happens to your business. Sometimes, it can also happen due to an economic impact caused by an unexpected crisis such as the current COVID-19 pandemic.
However, if you make the decision to close down your company in China, there are several legal steps in which you should closely follow. The process is long, involving multiple applications, de-registration, and negotiations.
Generally, the liquidation process takes 3-4 months or even longer. Finally, company dismissal, company liquidation, and company closure are three inevitable legal procedures of the legal entity, relating but also differentiating with each other. Once all the processes have been finished, the company will be deemed to be legally shut down in China. Among these, the company liquidation is most important, and the settling of assets and the liability process is most complicated.
GWBMA provides the one-stop service for company closure in China. We can help you with the proper completion of application forms, setting up the Liquidation Committee, deregistering of certificates, and answering & explaining to the tax authorities your actual situation, etc.
CLOSE DOWN COMPANY
The most secure and reliable service of closing your company
- A quick and inexpensive method of closure
Voluntary dissolution is a quick and inexpensive method of closure. - The best plan alternative procedure.
Closing it down completely removes it from the SAMR and allows you to move on. - Straightforward process
It’s a relatively straightforward process that can be managed by you as a Legal representative or director. - Closing a WFOE in 45 Working Days
If it is a new startup, the Comprehensive Deregistration process takes only about 45 working days.
Company Closure Process
Shut down a Foreign Invested company in 30-45 Working Days
Basic Documents Required
Documents required to Close down a company in China
License & Certificates
Business License and the other certificates, such as the Import & Export license (if you have). Golden Tax disc, USB key.
ID proof
The Photocopy of Passport or ID card of the company's Legal Representative.
Statement of Accounts
Fapiao collection and purchase book, Annual Reports, Annual Audit, Accounting reports, the tax returns monthly from setting up to now.
Stamps
Company stamp, Financial stamp, Invoice (Fapiao) seal and Legal Representative stamp
What do you get
What do you get after Company Deregistration
Tax Cancellation Certificate
You will receive the Tax cancellation certificate by Tax Bureau.
Company Deregistration Notification
You will receive the company cancellation Notification by SMAR
Frequently Asked Questions
Learn more about Company closure in China
How much does it cost to Close down a WFOE in China?
The Company closure cost depends on the company type, the business scale, and the business industries. Therefore, if you want to close down a company in China, just contact us directly. We’ll analyze your company situation and then provide the most cost-saving proposal.
What are the reasons to close down the company?
Most of the company closure reasons due to profit loss of their business in China, which has become too difficult and expensive to operate. Certainly, this situation can also happen due to an economic impact caused by the current COVID-19 pandemic.
What is the Liquidation Committee?
According to the Company law, Within 15 days of the decision to liquidate a company by the shareholders’ meeting, a Liquidation Committee must be formed. The committee will take responsibility for the liquidation procedures and report back to the shareholders.
Generally, the liquidation committee is comprised of at least 3 members including a chairman, which usually includes the Legal Representative.
What processes do I need to shut down a company?
The entire process of deregistration write-off for the company is generally about 5 to 7 months.
- State Administration for Market Regulation (SAMR) pre-filing.
- Newspaper billboard publication.
- The municipal taxation cancellation application.
- Go to the local tax bureau for cancellation.
- State Administration for Market Regulation (SAMR) cancellation fill submission.
- Social security cancellation.
- Bank write-off cancellation.
What is the government requirement for winding up the company?
According to the Company Law in China, the closure of companies is possible only after the company official submits a statement of Accounts, affidavit, indemnity bond, and bank closure certificate.
What are the legal consequences of the False announcement by the Liquidation Committee?
If the Committee publishes the false announcement and the company owes debts or liabilities when it closes and doesn’t go through the proper liquidation procedure, the legal representative and the member of the liquidation committee may be held personally and criminally liable.
What is the time taken to complete the company closure process??
If it is a newly established company that has just a little invoice issued, the complete company closure process takes about a minimum of 2 months.
Otherwise, the deregistration process takes about 3 to 6 months, depending on the accuracy and completion of the requirements.
What are the legal consequences of improper company closure?
According to the relevant laws and regulations of China, if a Foreign Invested Company didn’t take the right steps to close the business and clear all obligations, it might cause a lot of negative consequences and the mentioned company might attract penalties or even get blacklisted in China.
- If the companies are not declared to the tax authorities and annual inspection, they will be fined by the Tax bureau every year.
- The legal representative or the investors of the company will be put on the blacklist by SAMR, and they are unable to register a company again.
- The legal representative of the company will be put on the blacklist in China’s credit system and will not be able to buy an air ticket and High-speed rail ticket in China. and she/he might never get a visa from the Chinese Embassy again.
What are the related documents needed for company closure?
The following are the major legal documents required for company closure:
- Business License and related certificates
- Termination application form
- Liquidation report from a Chinese auditing firm
- Auditing report and related tax documents
- Separate application by the holding company
- Board resolution agreement or statement
- Certificate of approval from the Tax bureau
- Certificate of tax payment completion
- Deregistered bank accounts, registration certification, enterprise code certificate, and statistics certificates
- Notice of cancellation or dissolution
- Canceled commerce commission and seal
Could I stop renting the registered address during the company closure process?
The answer is No. Before the official deregistration certificate has been issued by the SMAR, a company will be required to maintain the office of registered address in the Business license the Company Closure process. Of course, you can negotiate with the Landlord of the office.