Company Deregistration, Liquidation & Bankruptcy in China
With the rapid growth of the Chinese economy and an array of opportunities, many corporations have begun to undertake plans to expand into China. Most ventures have been a success, but like in any market, some companies may still fail. In the event of this, company de-registration, liquidation & bankruptcy processes should be employed. They are often perceived to be problematic and this can be due to many reasons, but is not always related to financial difficulties. Sometimes unfortunate, other times an opportune move – de-registration is a risky process yet can yield great returns.
The normal procedure is for company de-registration, liquidation & bankruptcy is to create a committee to be appointed to gather and dispose of the assets of the insolvent and to pay the creditors. In China, the relevant government authorities must approve the liquidation of an enterprise and certain procedures must be followed.
Liquidation Committee Tasks
- Transmit declaration to the public (in 60 days) and to creditors (in 10 days) of the company liquidation
- Redaction of the liquidation plan and submission to right entities
- Calculate the value of the assets and liquidate those assets at a fair price and in the best interest of the company and creditors
- Pay off all due taxes and debts
- Generate a liquidation report as well as obtaining the approval from the board of directors and local authorities
- Report deregistration to all the authorities pertinent to your company
- Reallocate the capital left to the shareholders and close the bank account
In China, the procedure for company de-registration, liquidation & bankruptcy is rather complicated, particularly in the face of mainland customs and tax departments. Thanks to our history of working closely with all areas of Chinese tax and business regulations/legislation, LehmanBrown is intimately familiar with every sector of company de-registration and can therefore effortlessly guide you through an otherwise challenging task. LehmanBrown is able to offer advice on recovery plans as well as the more complex side of the liquidation procedure. In the current business environment, corporate restructuring and turnaround processes can often be closely linked to insolvency, which sometimes uncovers possibilities for saving the business. LehmanBrown has a thorough understanding of bankruptcy and liquidation procedures and the experience required for seeking out alternative financial sources. We are also able to offer proposals for reorganising debts and help for companies get back on track financially.
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