Beijing Market Entities Can Voluntarily Apply for Business Suspension
According to Article 211 of the Company Law of the PRC, if a company voluntarily suspends operations for more than 6 consecutive months after opening, its business license may be revoked by the registration authority. Such provision is really unfriendly to companies that are temporarily in financial difficulties and unable to operate normally, but do not intend to close down. In this regard, the registration of business suspension is introduced in the Beijing Market Entities Business Suspension Administrative Measures (Trial) (hereinafter referred to as “the Trial Measures? to help enterprises tide over difficulties. According to the Trial Measures, if a market entity intends to suspend its business, it may register with the business registration authority for suspension of business, become a dormant company, and the business entity shall survive during the suspension period. The following sections provide a brief introduction to the registration of business suspension in Beijing.
- Applicable Conditions and Subjects
Market entities that do not endanger national security, damage social public interests and the legitimate rights and interests of the counterparty of the transaction may independently decide to apply business suspension and apply for the record of suspension business according to law.
Companies, non-corporate legal persons and their branches (except listed companies) engaged in business activities for profit purposes within the administrative area of Beijing; Sole proprietorship enterprises, partnership enterprises and their branches; Farmers?specialized cooperatives (associations) and their branches; Individual industrial and commercial households; Market entities such as branches of foreign companies may apply for the record of business suspension. Except as otherwise provided by laws and regulations.
- Service of Legal Documents
During the business suspension period, the relevant legal documents shall be delivered to the address filed by the market entity as the legal documents?delivery address.
The legal documents?delivery address is a valid address that is confirmed to be true and accurate by the market entity and can receive the legal documents in a timely and effective manner. In addition to filling in the actual address, the electronic delivery address such as the email address of the market entity can be added.
During the business suspension period, it will not be regarded as an illegal act if the market entity cannot be contacted through the registered/operation premises.
The market entities may not lease their registered/operation premises during the business suspension period.
- Period of Business suspension
Enterprises may independently decide the period of business suspension, but the cumulative period of business suspension shall not exceed 3 years.
After applying for business suspension for the first time, market entities may apply for an extension of the business suspension period before the expiration of the period, or they may apply for business suspension again after the resumption of operations, provided that the cumulative period of business suspension shall not exceed three years.
- Annual Report
During the business suspension period, the business entities shall file annual reports to the registration authority.
- Filing of Tax Returns
During the business suspension period, the business entities shall file tax returns to the competent tax authorities.
- Social insurance and housing fund
After the registration of business suspension, if the market entity does not continue to pay the social insurance of the employees, it shall complete the social insurance reduction information registration of the employees in a timely manner. Market entities that still have labor relations with employees during the period of business suspension shall pay social insurance in full amount and on time in accordance with relevant regulations and laws.
Market entities shall, before business suspension, consult with employees on matters related to labor relations in accordance with the law. If the market entity still has labor relations with the employees during the period of business suspension, it shall pay the housing provident fund for the employees according to the Regulations on the Administration of Housing Provident Fund; If it is difficult to deposit, it can apply for decreasing the proportion of deposit or delaying the payment of housing provident fund according to the law.
In principle, the market entities shall not add new employees to their social security accounts during the period of business suspension, and when the market entities resume business, they should handle the business with the relevant departments in a timely manner.
- Legal Effect
Business suspension shall not affect the qualification of market entities, nor shall it affect the legal or agreed obligations of market entities such as asserting claims and performing debts, administrative penalties, administrative reconsideration decisions, judgments, arbitration documents, etc.
- Termination of Business Suspension
After a market entity has filed for suspension business, any of the following circumstances shall be deemed to have resumed business:
(1) Market entities independently decide to carry out business activities;
(2) Market entities have actually carried out business activities;
(3) the business has been suspended for a cumulative period of three years;
(4) the period of business suspension applied by market entities expires;
The market entity shall publicize the national enterprise credit information publicity system within 30 days after the occurrence of the above items (1) and (2). After the occurrence of Items (3) and (4), the market entity shall be deemed to automatically resume its operation.
Market entities that apply for change and record filing during the period of suspension shall publicize the resumption of business and then apply for the change and record filing.
KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advice and services in respect of the formation and registration of company, application for various business licenses and permits, any compliance, tax planning, audit, and accounting in China. Please call and talk to our professional consultants for details.
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