Suspension of Business Registration:How to Regulate Dormant Company
(Law School of Nanjing University,Nanjing 210000,Jiangsu,China)
Abstract:Most of China's company law emphasizes companies’operational continuity. Companies that have not operated for a long time will face negative social evaluation and legal punishment. However,in commercial practice,many companies hope to respond to market changes in a dormant state. In addition,based on industry characteristics and business plans,some companies will also be dormant in a certain period of time. In fact,the practice demand of dormant company also means that the suspension of business registration and dormant company system have a certain basis. Therefore,in the background of China's commercial registration reform,the Regulations on the Administration of Commercial Subject Registration (Draft) is to create the suspension of business registration. The system allows dormant companies to suspend business while retaining their commercial status. On the basis of absorbing foreign experience,the system construction of our country should focus on the following aspects:first,for the conditions of the registration,our country should stipulate the circumstances and subjects of application for the registration,and reduce the requirements for the company's internal procedures;second,for the period of suspension,we should consider to set the longest period of the company's suspension;third,as for the rights and obligations of the company,we shall provide convenience for the dormant company in four aspects,namely tax declaration,accounting,submission of annual report and convening of shareholders' meeting;and fourth,for the termination of the dormant state,we should confirm that the registration authority has the power to cancel the dormant state of the company,and improve the responsibility mechanism based on commercial credit.In addition,attention should be paid to the distinction between dormant companies and abnormal ones in order to protect the reasonable dormant needs of companies. At the same time,attention needs to be paid to connecting with relevant departments to facilitate supervision and reduce the cost of survival of dormant companies.
Key words:dormant company;reform of Commercial Registration System;Suspension of Business Registration;adminis⁃ trative supervision and management