I. Legal Responsibility and Punishment
Before the company is cancelled, the first thing it faces is legal responsibility. According to the Company Law of People's Republic of China (PRC) and relevant laws and regulations, after the company stops its business activities, it shall conduct liquidation and cancel its registration in time. If the cancellation procedures are not handled as required, the company, its legal representative and shareholders may face the following legal responsibilities:
1, which is listed in the list of abnormal business operations or the list of enterprises with serious violations of law and dishonesty, and affects the reputation and credibility of the company;
2. Being subject to administrative penalties such as fines and revocation of business licenses;
3. At the time of litigation, it may be considered as a legal subject because it has not been cancelled, thus bearing unnecessary legal responsibilities.
Second, financial and tax issues.
Failure to cancel the company may also bring financial and tax troubles. Companies that have not been cancelled still have to fulfill their obligations such as tax declaration and tax payment. Failure to file tax returns or pay taxes for a long time may lead the tax authorities to conduct tax inspections on the company and even take compulsory measures to recover taxes and late fees. In addition, the company's non-cancellation may also affect shareholders' personal credit records and adversely affect shareholders' personal finance.
Third, it affects the personal rights and interests of shareholders and executives.
For the company's shareholders and executives, the company's failure to cancel may also bring personal rights and interests risks. For example, shareholders may not be able to transfer their shares smoothly or participate in other investment activities because the company has not been cancelled; Executives may be restricted in their career development because the company has not been cancelled. In addition, if the company is involved in legal disputes or debt problems, shareholders and senior executives may be jointly and severally liable because the company has not been cancelled.
Fourth, hinder the company's future development.
For companies that intend to restart their business or restructure, the old companies that have not been cancelled may become a stumbling block to their future development. Companies that have not been cancelled may occupy the company name, trademark and other resources, resulting in the new company being unable to register smoothly or use related resources. In addition, unregistered companies may also affect the financing, cooperation and other commercial activities of the new company, bringing unnecessary trouble to the future development of the company.
To sum up:
Failure to cancel the company will bring many consequences, such as legal liability, fiscal and taxation issues, personal rights risks, future development obstacles and so on. In order to avoid these unnecessary troubles and risks, the company should complete the cancellation procedures in time to ensure the company's legal and standardized delisting.
Legal basis:
Company Law of the People's Republic of China
Article 188 stipulates:
After the liquidation of the company, the liquidation group shall prepare a liquidation report, submit it to the shareholders' meeting, the shareholders' meeting or the people's court for confirmation, and submit it to the company registration authority to apply for cancellation of company registration and announce the termination of the company.
Regulations of People's Republic of China (PRC) Municipality on the Administration of Enterprise Legal Person Registration
Article 22 provides that:
If an enterprise as a legal person fails to carry out business activities for six months or stops business activities for one year after receiving the Business License for Enterprise as a Legal Person, it shall be deemed to be closed, and the registration authority shall collect the Business License for Enterprise as a Legal Person and its copy and official seal, and notify the bank where it opened the account to cancel the account.