Compulsory Company Deregistration – Liability Elimination?

Compulsory Company Deregistration – Liability Elimination?

The Implementation Measures for the Compulsory Deregistration of Company Registration (hereinafter referred to as the "Measures") will be officially implemented starting from October 10, 2025 (today). These Measures provide clear operational guidelines for clearing companies that have been out of business for a long time. Below is a summary of the key contents of the Measures: 

Q1: Which companies are eligible for compulsory deregistration? 

A: The Measures apply to companies that have not applied for deregistration with the company registration authority within three years from the date of having their business licenses revoked, being ordered to close down, or being dissolved. This helps promptly clear "nominal" business entities that are no longer capable of conducting business activities in practice. 

Companies such as commercial banks—for which laws, administrative regulations, or decisions of the State Council stipulate that approval is required before deregistration—are not subject to the compulsory deregistration procedure. This is because their industries are special and closely related to the vital interests of the public. 

Q2: What is the specific procedure for compulsory deregistration of a company? 

The Measures standardize the process for compulsory deregistration of company registration and specify that a batch announcement method will be adopted for companies to be compulsorily deregistered, with an announcement period of 90 days. 

During the announcement period, relevant authorities, creditors, and other stakeholders may file objections with the company registration authority via the National Enterprise Credit Information Publicity System or in writing. The company registration authority will conduct a formal review of the objection applications; if an objection is deemed valid, the compulsory deregistration procedure shall be terminated. 

If no objections are raised by the end of the announcement period, or if the objections are deemed invalid, the company registration authority may deregister the company. The company shall terminate from the date of compulsory deregistration, and its business license shall be void. 

Q3: Does compulsory deregistration mean the elimination of liabilities? 

A: If a company is compulsorily deregistered, the liabilities of the original shareholders and liquidation obligors of the company remain unaffected. The original shareholders shall still bear their original capital contribution obligations and even joint liability in accordance with the law, so as to prevent evasion of legal obligations through the compulsory deregistration procedure. 

In addition, if a company that has been compulsorily deregistered falls into one of four necessary circumstances (such as being involved in a case or lawsuit), the company registration authority may, upon application by relevant authorities, creditors, or other stakeholders, restore the company's registration. To safeguard national interests and public interests, the company registration authority may also restore the company's registration on its own initiative.

Note：The second article today contains the full text of the Measures.