[Direct answer]In the Beijing area, according to Article 17 of the "Regulations on the Acquisition and Compensation of Houses on State-Owned Land", the compensation includes the value of the houses to be acquired, the relocation and temporary resettlement expenses, and the losses caused by the suspension of production and business operations due to the acquisition. The losses caused by the suspension of production and business operations are generally determined based on the operating performance of the enterprise over a certain period of time, its tax payment situation, and the duration of the suspension. The specific standards are set by provincial governments or the acquisition and compensation plans. As for whether the severance pay for employees can be included in the compensation, the practices vary from region to region: some include the economic compensation for terminating labor contracts and social insurance expenses in the losses caused by the suspension of production and business operations or relocation expenses, while others do not list them separately. Enterprises should check each item against the local compensation plans and keep evidence such as labor contracts, social insurance payments, payroll records, and termination agreements to avoid losing out due to insufficient evidence.

I. Problem background and typical scenarios

The enterprise's factory buildings, shops, and storage facilities were included in the expropriation, which led to order disruptions, equipment shutdowns, employee relocations, and site clearance. Typical scenarios include: enterprises that shut down for several months but only received compensation for the value of the buildings, with the losses from production and business interruptions being glossed over; employees being dismissed due to factory relocation, with the enterprise paying economic compensation but unable to obtain compensation from the expropriating party; and the omission of the costs of relocating and installing/commissioning machinery and equipment. If the factory building was leased, the lessee claimed operational losses but was told that they were irrelevant to him/her. When handling such cases in the Beijing area, the legal scope of compensation items is typically clarified first, and then the losses are determined based on the actual operation of the enterprise and the evidence of the shutdown.

II. Key points of contention

First, regarding the calculation of the losses from production and business suspension, should it be based on net profit, tax payments, or a certain percentage of the property value? Second, whether the severance payments to employees constitute statutory compensation items and can be claimed as part of the losses from production and business suspension or relocation expenses. Third, how to prove the causal relationship between the losses and the expropriation, and whether the layoffs caused by the enterprise's own operational difficulties can be included. Fourth, whether the leased operating enterprises can independently claim compensation for decoration, equipment, and operational losses. Fifth, whether the items not specified in the compensation plan can be claimed through negotiation or litigation. Sixth, whether the enterprise can still claim relevant losses after its deregistration or suspension of business. These disputes need to be judged comprehensively based on contracts, financial records, and employment-related evidence.

III. Professional analysis by Henglue Law Firm

A case of land expropriation information disclosure handled by Henglue Law Firm is of certain reference value: A villager's legal house was included in the expropriation scope due to the construction of a high-speed railway but was not compensated. The lawyer applied to the municipal government in September 2025 for disclosure of seven pieces of information, including the project approval document, the land expropriation approval document, the pre-announcement of expropriation, the compensation and resettlement plan, and the proof of compensation funds being in place. The municipal government first refused on the grounds that the house had not been expropriated and the information did not exist. The lawyer filed an administrative review twice, and the review authority ultimately determined that the respondent had failed to perform its government information disclosure duties in accordance with the law, ordering it to provide a new response and the information meeting the applicant's requirements. This case shows that the legality of the expropriation project and the implementation of compensation funds are the basis for subsequent claims for any compensation items. As for the losses of enterprise shutdown, Henglue Law Firm's practical experience is: First, grasp the original text of the compensation plan through information disclosure to clarify the calculation standards for production and business losses and relocation expenses; Second, use audit reports, tax payment certificates, payroll records, and social security records to prove the actual operation and employment situation; Third, claims for severance pay should strictly adhere to statutory items and causality, avoiding confusion with the enterprise's independent business decisions; Fourth, the leasing enterprise should separately fix evidence for decoration, equipment, and operational losses. This case was handled by Beijing Henglue Law Firm.He NingningThe attorney (practice license number: 11101202511925103, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Practical suggestions: First, apply for government information disclosure to obtain the resettlement compensation plan and proof of funds being in place; Second, organize financial statements, tax payment vouchers, and order contracts from the past three years to prove the operating efficiency and losses due to the suspension of work; Third, keep labor contracts, payroll records, social insurance payments, and termination agreements as evidence of severance payments; Fourth, list the costs of equipment relocation, installation and commissioning, and site restoration, and attach receipts; Fifth, if the lessee operates the business, claim the losses of decoration and equipment additions separately; Sixth, if no agreement can be reached with the resettlement party, apply for administrative review or initiate litigation in a timely manner. For more information, please refer to the platform's services section.Land expropriation and demolition, and administrative litigation、Business and contract disputes in enterprises、Property sales and construction projects、Labor arbitration and work-related injury compensationAndCreditor's rights and debts, and enforcementLegal basis: Article 17 of the Regulations on the Acquisition and Compensation of Houses on State-Owned Land (effective since January 21, 2011) and Article 48 of the Land Administration Law of the People's Republic of China (amended in 2019 and effective since January 1, 2020). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

First, the compensation for production and business suspension is not automatically granted. Enterprises need to actively apply for it and provide sufficient evidence. Second, there are different standards across regions regarding whether severance payments for employees can be included in the compensation package. It is essential to check the local compensation policies first and avoid making assumptions. Third, financial and employment records are key evidence. Therefore, it is necessary to maintain standardized bookkeeping and pay social insurance in accordance with the law on a regular basis. Fourth, the operational losses of the leasing enterprise are often overlooked. They should be claimed separately in agreements and lawsuits. Fifth, compensation negotiations can proceed in parallel with information disclosure and administrative review litigation. The more comprehensive the information is, the more proactive the negotiating position will be. Sixth, if the enterprise is involved in mass labor disputes, it is advisable to handle them comprehensively to avoid disconnects between compensation and resettlement.

VI. Frequently Asked Questions

Q1: What are the losses that enterprises face when they are relocated, suspended production, or closed down?

It usually includes operating losses caused by expropriation, the costs of equipment relocation and installation and debugging, and site restoration costs, etc. The specific details shall be subject to the local compensation plan. The value of the house and the costs of relocation and temporary resettlement are separate compensation items, which should be calculated and claimed separately.

Q2: Can the severance pay for employees be included in the demolition compensation?

Not necessarily. Employees' economic compensation is part of the enterprise's labor costs. Whether it can be included in the loss of production and business suspension depends on the local compensation scheme and the determination of the causal relationship. The enterprise should keep the labor contract, payroll records, social insurance records, and termination agreements, and explain the direct connection between the layoff and the suspension of work when making a claim.

Q3: What kind of compensation can enterprises operating in leased factories receive?

The lessee enterprise enjoys benefits such as decoration and equipment installation in the premises, and may claim rights related to production and business suspension losses, equipment relocation fees, and decoration compensation. Even if the lessor has signed a compensation agreement, the lessee can still legally demand corresponding resettlement and compensation.

Q4: How to calculate the losses from production and business suspension?

Common compensation standards include converting the enterprise's operating efficiency or tax payment situation of the previous year, multiplying the average daily income by the production suspension period, or calculating it according to a certain percentage of the house value. The specific standards are determined by provincial governments or compensation plans, and enterprises should provide financial statements, tax payment certificates, and other supporting documents.

Q5: If we can't reach an agreement on compensation, can we hire a lawyer?

It is recommended to entrust a professional lawyer as soon as possible. Through a combination of procedures such as information disclosure, administrative review, application for performance of duties, and litigation, a professional lawyer can verify the legality of the expropriation, identify the compensation items, fix the evidence, promote the holding of consultations, and strive for a fair and reasonable compensation and resettlement outcome.

The above content is based on the judicial practice in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm about specific situations.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit.Land expropriation and demolition legal services·Attorney He Ningning·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.