Which enterprises can apply for summary deregistration?
According to the SAIC's requirements on pilot applications, an enterprise can apply for summary deregistration if (i) it has not yet commenced business operations or (ii) it is free of debts and accounts receivable. Based on this principle, some pilot areas have imposed additional restrictions regarding good standing, company type, term of operations and/or registered capital. The Shanghai Pudong New District, for example, further requires enterprises seeking summary deregistration to be organized as limited liability companies or partnerships, and to have been organized within the last three years. Enterprises included in the directory of businesses with abnormal operations. These restrictions prevent other types of enterprises, such as sole proprietorships, from submitting applications for summary deregistration.
How does the summary deregistration procedure simplify the deregistration process?
In comparison with the ordinary procedure for company deregistration, the summary procedure for company deregistration simplifies both the application process and the procedure itself. According to plans formulated by all of the pilot areas, enterprises (or parts of enterprises) that are eligible for summary deregistration no longer need carry out liquidation group filing or publish announcements of the same in newspapers. Correspondingly, most of the pilot areas no longer require enterprises to submit liquidation reports or record filing certificates for the liquidation groups.
In addition, the summary deregistration has also, to various degrees, simplified the ordinary deregistration period's 45-day period requirement for public announcement in newspapers. This relatively complex requirement is no longer strictly required, and the announcement period has been greatly abbreviated. Zhejiang Province, for example, allows enterprises to carry out their public announcements through the enterprise credit and information publication system for a period of only 10 days.
How is summary deregistration regulated?
To prevent enterprises from maliciously utilizing the summary procedure for company deregistration to evade debts or infringe the rights of other parties, the pilot areas have all provided for the filing of oppositions to the summary deregistration as well as corresponding remedies. In addition to the requirement that the registration authority conduct a formal examination of the authenticity of the materials submitted by the enterprise, once a third party files an opposition before an approval decision has been issued, the registration authority must terminate the summary procedure for company deregistration and issue a rejection of the application. The enterprise cannot re-apply for summary deregistration, but can still utilize the ordinary procedure for company deregistration.
Furthermore, some pilot areas also provide that if an enterprise is cancelled by the registration authority for concealment of facts or fraudulent acts, the enterprises will be included in the directory of businesses with abnormal operations and published on the enterprise credit and information publication system.
(Abstracted from Several Issues Concerning Summary Deregistration, by Yiqi Cai)
华诚律师事务所（Watson&Band）
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
