A company may still legally exist even after closing its office, letting staff go or ceasing to generate revenue. Unless it has properly registered a business suspension or completed dissolution, it may still have tax, filing, reporting and record-keeping obligations.
The longer matters are left unresolved, the harder it may become to reconstruct records and address fines, late-payment charges or requests for explanations. Businesses should therefore check their status proactively and choose an appropriate course of action.
Stopping trading is not the same as registering a suspension
Business suspension is a legal status that must be registered as required by law. Merely stopping sales, closing social media accounts or vacating premises does not automatically change the company's status to suspended in the business registration system.
If the company has not notified its suspension on time, tax filing and related obligations may still be assessed on the basis that it remains active. Businesses should check both their registration status and tax identification status, as these two sources may reveal different issues requiring attention.
Risks that may continue to arise
- Administrative fines and late-payment charges may increase over time.
- Outstanding returns, reports and tax obligations may need to be completed before dissolution.
- Matters relating to invoices, bank accounts, digital signatures and dependent units may remain outstanding.
- A legal representative may face enforcement measures or a temporary restriction on leaving the country if the conditions under tax administration law are met. This does not automatically apply to every inactive company.
Where should you start?
First, businesses should check their legal status, tax identification status and list of dependent units. They should then gather the Enterprise Registration Certificate, seal, digital signature, invoices, accounting records, bank statements, employment contracts and any notices received from state authorities.
Based on these records, the company can choose to resume operations, register a suspension, resolve violations and outstanding obligations, or proceed with dissolution. If it cannot pay its debts, the potential application of bankruptcy procedures should also be assessed rather than assuming an ordinary dissolution is available.
Do not leave an inactive company unresolved
Abandoning a company does not make its obligations disappear. Work through the outstanding issues in a clear order: check its status, complete missing records, liaise with the tax authority, settle obligations to employees and creditors, close dependent units and file for dissolution once the conditions are met.
This article provides general information. The appropriate approach depends on each company's actual tax position, debts, invoices, employees, assets and records.