Exit the process as planned when losses occur: opt for simplified deregistration when possible, or file for bankruptcy if debts exceed assets — don’t leave things unattended

Cost: Simplified deregistration can be handled independently: just post the notice on the National Enterprise Credit Information Publicity System for 20 days. For businesses still owing debts, it’s necessary to first settle accounts — collect what’s due and pay off obligations; this step is called liquidation. Filing for bankruptcy requires an application to the court and typically takes several months. The real difficulty lies in the reluctance to face the situation after suffering losses, leading to procrastination.

In plain terms: If a business has no outstanding debts, unpaid wages, taxes, or social insurance dues, all investors can issue a written commitment; once posted for 20 days with no objections, simplified deregistration becomes possible. Individual businesses don’t need to post any notice — if no objections arise within 10 days, they can be deregistered directly. When debts cannot be repaid, bankruptcy should be applied for. Leaving things unattended, failing to submit annual reports for two years, and becoming unreachable at the registered address results in revocation of the business license; the responsible legal representative is barred from serving in such a role for three years.

Benefit: No debts owed to others, nor any owed to the business; all obligations — including wages, social insurance, and taxes — are fully settled. All investors have issued written commitments. Meeting these criteria allows simplified deregistration after a 20-day public notice period with no objections; individual businesses can be deregistered directly after 10 days with no objections. Companies unable to repay due debts and facing liabilities exceeding their assets may apply to the court for reorganization, settlement, or bankruptcy liquidation. If a dissolved company still has unpaid debts exceeding its assets, the designated liquidator must file for bankruptcy liquidation. Neglecting these steps brings serious consequences: failure to submit annual reports on time results in being listed as a business operating abnormally. Two consecutive years of non-compliance, coupled with being unreachable at the registered address, leads to license revocation; any individual responsible as legal representative is prohibited from holding such a role for three years. Businesses already listed as operating abnormally are ineligible for simplified deregistration nationwide.

Evidence grade: A

Sources:国务院 (2021). 市场主体登记管理条例（国务院令第 746 号，第三十一、三十二、三十三条）. https://www.gov.cn/zhengce/zhengceku/2021-08/24/content_5632964.htm；市场监管总局等六部门 (2025). 企业注销指引（2025 年修订）（2025 年第 52 号公告）. https://www.gov.cn/zhengce/zhengceku/202512/content_7053238.htm；全国人大常委会 (2006). 企业破产法（第二、七条）. http://www.gov.cn/gongbao/content/2006/content_413952.htm；国务院 (2024 修订). 企业信息公示暂行条例（国务院令第 777 号修订，第十八条）：「企业因连续2年未按规定报送年度报告被列入经营异常名录未改正，且通过登记的住所或者经营场所无法取得联系的，由县级以上市场监督管理部门吊销营业执照」. https://flk.npc.gov.cn/detail?id=ff8081819c46fcc5019cd18fc6e9557d（国家法律法规数据库）；国务院 (2024). 关于修改和废止部分行政法规的决定（国务院令第 777 号）. https://www.gov.cn/gongbao/2024/issue_11246/202403/content_6941844.html；市场主体登记管理条例（第十二条第四项）与公司法（2023 年修订，第一百七十八条第一款第四项）：担任因违法被吊销营业执照的企业的法定代表人并负有个人责任的，自被吊销营业执照之日起未逾 3 年不得担任法定代表人和董事、监事、高级管理人员. https://www.gov.cn/zhengce/zhengceku/2021-08/24/content_5632964.htm；https://www.gov.cn/yaowen/liebiao/202312/content_6923395.htm

Notes: The Interim Regulations on Public Disclosure of Enterprise Information were revised via State Council Order No. 777 in 2024 and took effect on May 1; no further amendments have been made since. The former Article 17 — stating that businesses operating abnormally for three years would be added to the list of seriously law-violating enterprises — has been removed. Currently, the list of seriously untrustworthy enterprises applies only to entities found guilty of deliberate falsification in annual reports under severe circumstances. Many online sources still reference the outdated version, so care must be taken. As of now, individual bankruptcy mechanisms — applicable to individual businesses — are only being piloted in select regions; this section has not been cross-verified against original sources, hence is not included here.