[Direct answer]In the Beijing area, the cancellation of a unit does not mean that its liabilities are extinguished. There is usually still room for arbitration to proceed, but the key lies in whether the cancellation is carried out in accordance with the law. If the employer cancels its registration without going through legal liquidation, workers can apply to the arbitration committee to add the unit's shareholders and investors as parties to the case, or file a separate lawsuit to require them to bear the responsibility for the company's debts. This is based on the provisions of Articles 19 and 20 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (II)" (amended in 2020) regarding the liability for cancellation without legal liquidation. If the unit has been legally liquidated and cancelled, the arbitration request may be terminated or rejected due to the disappearance of the subject. In this case, efforts should be directed towards holding the liquidation obligors accountable or claiming against the third parties who have undertaken the responsibility. In any case, the first step in determining the appropriate course of action is to retrieve the industrial and commercial archives and cancellation materials from the registration authority. For more details, please refer to the following link:Labor arbitration and legal services for work-related injury compensation.

1. Problem background and typical scenarios

It is a common unexpected situation for workers to discover that their employer has been "deregistered" during the arbitration process: the court summons has not been delivered yet, but the company's business license has already been revoked; even if the arbitration award is in favor of the worker, the company may no longer have a legal entity to enforce the judgment; the company may verbally agree to mediation, but later renege on its promise after deregistration; some companies even use false liquidation materials to fraudulently obtain deregistration. It should be noted that the employer's debts will not automatically disappear upon deregistration. The Company Law Judicial Interpretation has long established liability channels for "debt evasion-style deregistration". The practical difficulty lies in identifying the nature of the deregistration in a timely manner and identifying the shareholders or third parties who should bear responsibility. For cases involving company liquidation and shareholders' investment responsibilities, it may be necessary to combine relevant legal provisions to determine the applicable legal provisions and liability allocation.Business and contract dispute resolution services for enterprisesHandle them together.

II. Key points of dispute

The focus of such cases lies in three aspects. Firstly, whether the cancellation procedure is legal: if the liquidation group is established in accordance with the law, known creditors are notified, debts are honestly declared and liquidated in accordance with the law, and the company is then cancelled, the legal consequences will be completely different from those of cancelling the registration without liquidation or using false liquidation materials to fraudulently obtain cancellation. Secondly, how to determine the responsible parties: shareholders of limited liability companies, directors and controlling shareholders of joint-stock companies, actual controllers of the company, and shareholders or third parties who promised to assume responsibility for the company's debts at the time of cancellation registration may all become liable parties. Thirdly, how to coordinate the procedures: whether to apply to the arbitration committee for a change or addition of parties, or to directly sue the shareholders in a separate case, or to apply for enforcement of the effective arbitration award, all require considering the progress of the case and the choice of evidence. Improper choices may result in a waste of time and expenses.

III. Professional analysis by Henglue Lawyers

A commercial arbitration case handled by Attorney Bingrong Xiong fully demonstrates the practical approach to "how to hold accountable parties after a company is deregistered", which is also applicable to labor disputes. The case involved the following circumstances: On May 20, 2022, Wang * signed a "Transfer Contract of Net Film Profit Rights" with Beijing B Culture Media Co., Ltd., investing 800,000 yuan and agreeing on profit sharing and a minimum compensation clause. On the same day, the guarantor issued a "Guarantee Letter" to provide guarantees. However, the film failed to be released as scheduled, and B Company actually went through the deregistration registration on May 12, 2023, before the film's release, without notifying Wang * to conduct profit settlement, conducting legal liquidation, or truthfully declaring debts. Wang * first sued the court, but the arbitration clause in the contract was ruled to be inadmissible. Subsequently, he entrusted Attorney Bingrong Xiong to apply for arbitration to the Beijing Arbitration Commission, listing the shareholders of B Company as Respondents One and Two, and the guarantor who issued the "Guarantee Letter" as Respondent Three. Attorney Xiong argued that: B Company deregistered without conducting legal liquidation, and the shareholders should bear the responsibility for the company's debts; the supplementary contract's condition of making up to 800,000 yuan had been fulfilled; and the guarantor was bound by the arbitration clause and should bear joint and several guarantee liability. All three respondents failed to appear in court, and the arbitration tribunal supported the above opinions after conducting a default trial, ruling that the shareholders should return the investment principal of 800,000 yuan and bear reasonable expenses such as attorney fees. This case shows that the irregular deregistration of a company cannot prevent the realization of creditor's rights. It is crucial to promptly identify the shareholders and guarantors and quickly complete the procedural transition. This case was handled by Beijing Henglu Law Firm.Xiong BinrongThe lawyer (practice license number: 11101202211410897, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical Suggestions and Legal Basis

The legal basis includes: Article 19 of the "Interpretation of the Supreme People's Court on Several Issues concerning the Application of the Company Law of the People's Republic of China (II)" (amended in 2020) (liability for maliciously disposing of property and fraudulently obtaining deregistration through false liquidation materials); Article 20 (when shareholders and others bear liability for the company's debts if deregistration is carried out without liquidation, and shareholders or third parties who promise to bear liability shall also bear corresponding responsibilities); and the "Arbitration Rules for Labor and Personnel Disputes" (promulgated by the Ministry of Human Resources and Social Security Order No. 33, implemented on July 1, 2017) regarding the suspension or change of parties' qualifications during arbitration. Practical suggestions: If the unit shows signs of deregistration, immediately send written notices to creditors to assert their rights; if deregistration has already occurred, immediately retrieve the industrial and commercial archives to confirm the deregistration method and liquidation situation; if arbitration is ongoing, apply in writing to add or change parties; if the case has not been registered yet, directly apply for arbitration or initiate litigation against shareholders and others as respondents, and apply for property preservation if necessary. For issues involving debt recovery and property investigation, follow-up actions can be taken accordingly.Creditor-debtor relations and enforcement case servicesAdvance.

5. Henglu Law Firm's Reminder

The most common "trick" used by companies to deregister is to delay the process: waiting until the arbitration hearing, passing the mediation period, and then using a deregistration registration to attempt to cut off liability. The key action to counter this is simply to act quickly. If you discover that the company has lost contact, transferred assets, or applied for deregistration, immediately secure creditor's certificates, report the matter to the arbitration committee, apply for property preservation, and, if necessary, file a lawsuit against the shareholders simultaneously. Special note: If the shareholders have written commitments to assume liability at the time of deregistration, they can still be held accountable according to the commitments even after the company has been deregistered. If you need help, please consult as soon as possible.Professional labor arbitration lawyersDon't wait until the main enemy is eliminated before taking action.

VI. Frequently Asked Questions

Q1: If the unit is deregistered during the arbitration process, can the case still proceed?

In most cases, there is still room for relief, but this cannot be generalized. If the unit carries out the cancellation registration without going through legal liquidation, or if the shareholders promise to assume responsibility for the company's debts during the cancellation process, workers can apply to add the shareholders as parties to the case or file a separate lawsuit to require them to assume responsibility for the company's debts. Generally, the case will not "automatically disappear" due to the cancellation; if the unit has gone through legal liquidation and cancellation, the original arbitration claims may be terminated or rejected due to the disappearance of the respondent's subject, and workers need to turn to seeking compensation from the liquidation obligors. The difference lies in "whether the liquidation is carried out according to law", so retrieving the industrial and commercial archives and reviewing the cancellation materials are the first steps.

Q2: Who should I notify after the unit is deregistered? What evidence do I need to prepare?

The parties liable for the debts usually include: shareholders of limited liability companies, directors and controlling shareholders of joint-stock companies, actual controllers of the company, and shareholders or third parties who have committed to assume responsibility for the company's debts at the time of deregistration. Evidence includes: the arbitration application and acceptance notice (to prove the stage of the case), labor contracts and salary records (to prove the labor relationship and creditor's rights), the employer's industrial and commercial registration files (to prove the time of deregistration, liquidation situation, shareholder identity and investment), written materials of the commitment to assume responsibility at the time of deregistration (if available), and property clues (accounts, real estate, vehicles). The organization of evidence revolves around three links: "existence of creditor's rights - illegal deregistration procedures - clear parties liable for the debts".

Q3: If we add a shareholder or file a lawsuit in a separate case, what are the approximate costs involved?

At the labor arbitration stage, there is no additional fee for applying to add or change parties, and the arbitration itself is also free of charge. If a separate lawsuit is filed against a shareholder, the litigation fee shall be prepaid in accordance with the standard for property cases, and the litigation request amount shall be used as the basis for cumulative calculation in stages. In the end, the losing party shall bear the cost. The attorney's fee shall be determined through consultation based on the complexity of the case and the workload, and is usually charged as a percentage of the subject matter or in stages. If an application for property preservation is made at the same time, preservation fees and guarantee fees will also be incurred. It should be noted that timing is more important than fees—delaying the process may lead to shareholders transferring assets or losing evidence, which in turn increases the difficulty of recovering payments.

Q4: How long does it take from discovering the account cancellation to receiving the results?

The timeframe depends on the procedural choices: retrieving business registration files typically takes several working days; for arbitration committees to modify or add parties, the process must be completed within the 45-day decision-making period. Complex cases may be extended by 15 days with approval; for separate litigation, the first-instance ordinary procedure takes six months and the summary procedure takes three months. Cases involving public notice service or where the shareholders' whereabouts are unknown may take even longer. If there is an effective arbitration award before the unit is deregistered, directly applying for enforcement and adding the changed parties to the enforcement list may expedite the process. Overall, straightforward cases can yield results within a few months, while complex cases may last more than a year.

Q5: I found that my employer is in the process of being deregistered. What should I do specifically?

Four steps to deal with it: First, immediately assert your rights, send a written reminder letter to the employer and keep a record of it, and at the same time report the situation to the arbitration committee and the court to prevent them from completing the cancellation outside the creditor's view; Second, apply for property preservation, freeze the unit's account or seize equivalent property, and act quickly; Third, retrieve the industrial and commercial archives to confirm the cancellation time, whether the liquidation is carried out according to law, and the shareholder's identity and investment situation; Fourth, choose to add additional parties, change the respondent or sue the shareholders separately according to the progress of the case. The whole process is highly procedural, so it is recommended to hire a lawyer as soon as possible to formulate a plan.

The above answer is based on the judicial practice in Beijing. The adjudication standards in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence to avoid missing the statutory time limit.Labor arbitration legal services·Attorney Feng Na·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is provided 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 the event of a dispute, please consult a practicing lawyer in a timely manner.