Q：
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What does the enterprise need to do after terminating its business activities?
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A：
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Generally, the termination of business activities and exit of the market need to go through three main processes: dissolution, liquidation and distribution and deregistration. According to the Company Law, before the company exits the market and officially terminates, the company shall announce dissolution according to law, establish a liquidation group to liquidation, clear up the company’s property, pay taxes, clear up creditor’s rights and debts, pay employees’ wages and social insurance expenses, etc. After the liquidation of the company is completed, the liquidation report shall be made, the company’s deregistration shall be proceeded, and the termination of company declared.
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Q：
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What is enterprise dissolution?
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Dissolution of an enterprise is a legal act in which an enterprise stops its business activities, starts liquidation procedures and terminates its legal personality due to reasons for legal dissolution, including voluntary dissolution and compulsory dissolution.
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What is voluntary dissolution?
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Voluntary dissolution refers to the dissolution of the company based on the wishes of the enterprise or shareholders. Including: the business term specified in the articles of association expires or other reasons for dissolution specified in the articles of association occur; the shareholders’ meeting or the general meeting of shareholders decides to dissolve; dissolution due to merger or division of the company, etc.
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Q：
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What is compulsory dissolution?
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Compulsory dissolution refers to the dissolution that occurs not according to the wishes of the company or shareholders but based on the decisions and orders of relevant government departments or the ruling of the court. It is usually divided into administrative decision dissolution and judicial decision dissolution.
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What is administrative decision dissolution?
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A：
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Administrative decision dissolution refers to the situation that the company is ordered to dissolve by the administrative authority in accordance with its functions and powers because its behaviour violates laws and regulations and damages the social public interest or public order, including the revocation of its business license, closure or cancellation in accordance with the law.
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What is judicial decision dissolution?
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Judicial decision dissolution refers to that if the company has serious difficulties in operation and management and its continued existence will cause significant losses to the interests of shareholders, which cannot be solved by other means, the shareholders holding more than 10% of the voting rights of all shareholders of the company file a lawsuit for dissolution of the company to the people’s court and request the people’s court to dissolve the company.
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