Author: Junanda ConsultingReviewed by: Junanda Service Team2026-09-19
Once a company has decided to stop trading, deregistration is often the last action to be postponed. Many owners take the view that once the business stops trading they can leave the company sitting there, since there is no tax to report anyway. In reality, an enterprise that has not been deregistered must still file on time. If it is neglected over a long period it may be entered on an abnormal operations list, and the legal representative and shareholders may face restrictions on high-value consumption, on leaving the country, or on making new registrations.
Deregistration itself is not difficult; what is difficult is the clean-up beforehand. Once the sequence and the checklist are clear, the great majority of deregistrations can be completed smoothly.
1. The Overall Sequence of Deregistration
There is one basic ordering principle: tax first, then administrative registration; settle the tax position before deregistering the registration; clean up before closing out. The process can be broken into four stages:
Internal decision stage: the shareholders' meeting adopts a resolution to dissolve the company, and a liquidation committee is established (or a person responsible for the liquidation is designated), with the liquidation period and the responsible persons defined.
Clean-up stage: settle taxes, repay debts, deal with assets, recover receivables, stop social insurance and housing fund contributions, and close the various accounts.
Tax settlement stage: file the settlement of tax liabilities with the tax authority and obtain the tax clearance certificate.
Administrative deregistration stage: submit the deregistration application to the market regulation department and complete the deregistration; then deal with seals, licences and the remaining closing matters.
The sequence cannot be reversed. If you apply for administrative deregistration before the tax position is clean, the materials will be returned. If you assume the matter is finished without closing the bank accounts, account management fees and compliance problems may follow.
2. Key Points of Tax Settlement
This is the most substantive part of the whole deregistration. The points to check include:
Settle taxes due and late payment surcharges: this covers taxes due from years in which no filing was made, and taxes declared but not paid. Late payment surcharges accrue daily, so the longer the matter is left the higher the cost becomes; it is worth dealing with it as early as possible.
Surrender unused invoices and tax control devices: surrender unused blank invoices, and complete the deregistration or disposal of tax control devices or the media relating to fully digitalised e-invoices.
Complete the final filing period: file the value-added tax, surcharges, financial statements and so on for the year of deregistration in full and on time, leaving no gap period.
Final corporate income tax filing on liquidation: when an enterprise ceases trading it must declare its liquidation income, and this is the step that many enterprises overlook. Calculating liquidation income involves the gains and losses on the disposal of assets and the outcome of clearing claims and debts, so it should be planned in advance and handled carefully.
Check tax preferences and filing matters: where preferences have previously been enjoyed, or filings made, confirm whether any corresponding action is required.
Keep the tax payment vouchers and the tax clearance certificate: these are essential materials for the administrative deregistration that follows.
3. Two Routes for Administrative Deregistration
Administrative deregistration offers two routes: simplified deregistration and ordinary deregistration.
Simplified deregistration is available to market entities that have incurred no claims or debts, or have already discharged them in full, and that have no unsettled tax matters, among other qualifying conditions. Its distinguishing features are that no liquidation committee needs to be established and no liquidation report needs to be submitted; the process is comparatively short, but publication has to be carried out as required. Where an objection is raised during the publication period, or a circumstance making the route unavailable exists, the case moves to ordinary deregistration. The specific qualifying conditions and publication arrangements are subject to the announcements issued by the local registration authority.
Ordinary deregistration is for enterprises that do not meet the conditions for simplified deregistration, or that choose the ordinary procedure. The key points include:
establishing a liquidation committee and filing the committee's records;
publishing a notice to creditors (the existence of a publication period is certain, but the specific number of days is subject to the local announcement requirements);
preparing a liquidation report setting out the disposal of assets, the repayment of debts and the distribution of the remaining property;
submitting the deregistration application, together with the shareholders' resolution, the liquidation report, the tax clearance certificate and other materials.
4. Social Insurance, Housing Fund and Bank Accounts
Social insurance and the housing fund require two steps: first, remove the participating staff and stop contributions, confirming that nothing is owed; then close the entity's account. Note that the removal of a departing employee from the scheme should correspond to the actual date of departure, so as to avoid disputes over over-payment or under-payment.
Bank accounts: both the basic deposit account and the general deposit accounts must be closed. Before closing them, make sure the balances have been transferred out, that there are no outstanding instruments and no unpaid fees, and hand back the security token, cheque books, specimen seals and similar as required. Where an account has been inactive for a long time and has become a long-dormant account, the process may take longer, so it is advisable to speak to the account-opening bank in advance.
Foreign exchange accounts: enterprises involved in import and export business also need to close their foreign exchange accounts as required, and confirm that there are no unverified transactions.
5. Seals, Licences and Qualifications
The disposal of seals is easily overlooked. After a company is deregistered, the company seal, finance seal, contract seal, invoice seal and the legal representative's name seal should be surrendered or destroyed as required, with records kept, so that nothing is left behind that could be misused.
As for licences and qualifications, any licence obtained during the period of operation (such as a food business licence, a road transport permit or a human resources services licence) and any industry qualification must also be deregistered or filed as required. Deregistering the business licence alone is not the end of the matter.
6. Claims, Debts, Remaining Assets and Capital Contribution Liability
Two things must be done before deregistration: recover claims as far as possible, and repay debts or arrange them clearly. Claims that genuinely cannot be recovered, and debts that cannot be repaid, should have their treatment, and the basis for that treatment, set out clearly in the liquidation report.
The order in which remaining property is distributed is generally: liquidation expenses, employees' wages and social insurance costs, taxes, and the repayment of debts; the balance is then distributed in proportion to the shareholders' contributions or as agreed in the articles of association. Where shareholders have not yet paid up their contributions, they will generally still have to perform the corresponding contribution obligation in the liquidation, in order to repay the company's debts. They cannot be released from that obligation simply on the ground that "the company has been deregistered". A subscribed capital regime does not mean the capital never has to be paid: where the company's assets are insufficient to meet its liabilities, the shareholders remain liable within the scope of what they subscribed.
7. The Consequences of Revocation Without Deregistration
Where an enterprise's business licence has been revoked, its legal personality is not extinguished, and it must still perform its liquidation and deregistration obligations. If the matter is left unaddressed for a long time, the consequences commonly include being entered on the abnormal operations list or the serious illegality list, restrictions on the legal representative holding office, restrictions when applying for loans or taking part in tendering, and possible administrative and credit consequences. Once a licence has been revoked, therefore, the liquidation and deregistration process should be started as soon as possible.
Self-Check Checklist
Decision: has the shareholders' resolution to dissolve been adopted?
Decision: has the liquidation committee been established and its records filed?
Tax: are taxes, late payment surcharges and fines settled?
Tax: have blank invoices been surrendered and tax control devices dealt with?
Tax: has the final filing period been completed?
Tax: has the final corporate income tax filing on liquidation been completed?
Tax: has the tax clearance certificate been obtained?
Administrative registration: has a choice been made between simplified deregistration and ordinary deregistration?
Administrative registration: has the notice to creditors, or the publication, been completed as required?
Administrative registration: has the liquidation report been prepared and confirmed by the shareholders?
Social insurance and housing fund: has staff been removed from the scheme, has the account been closed, and is anything owed?
Bank: have the basic account and the general accounts been closed?
Bank: have the security token, cheques and specimen seals been handed back?
Foreign exchange: has the foreign exchange account been closed, and are there any unverified transactions?
Seals: have the various seals been surrendered or destroyed, with records kept?
Licences: have the various licences and qualifications been deregistered?
Claims and debts: have claims been recovered, and have debts been repaid or arranged?
Capital contribution: has the shareholders' subscribed capital been dealt with under the applicable rules?
Other: how are trademarks, patents, domain names and platform accounts to be disposed of?
Other: are the financial archives being kept as required?
This article is general business information prepared by Junanda Consulting. Specific policy positions, tax rates, deadlines and procedural requirements are subject to the latest official versions issued by the competent authorities. To understand how these requirements apply to your business, please contact Junanda Consulting for further information and support.
