In an attempt to further advance the reform of “streamlining administration, delegating powers, and improve regulations and services” and provide greater protection to market players by offering assistance to help enterprises pull through trying times, Nanjing City has adopted a policy allowing enterprises to fall in dormancy since this March. It is learnt that enterprises that have decided to suspend operation and have promised not to conduct any trade during the designated period may apply to market administration authorities for entering in a dormant state.

On April 13, Nanjing Jiangbei New Area Administration of Market Regulation processed the application for dormancy for Nanjing Huiruitong Sci-tech Co., Ltd, which became Nanjing’s first ever enterprise in dormancy. Any dormant enterprise, whose one-time dormancy may not exceed two years, should refrain from doing business in the name of the enterprise, and is legitimate for multiple applications for dormancy. Market administration authorities, when conducting “random inspection by randomly selected personnel with public release of inspection results”, should not include dormant enterprises in the List of Enterprises with Abnormal Operations for not being able to contact them via registered addresses.

This new policy tends to explore larger rooms for businesses to grow. In the days to come, market regulatory authorities will play a greater role in instructing and assisting enterprises to leverage the policy on the basis of the reality, enhance follow-ups and evaluation of policy implementation, improve the service and increase the regulatory efficiency based on understanding the needs of the enterprises in a timely manner, in a bid to energize innovation and start-up initiatives, motivate the market players and empower the high-quality development. For any enterprise, dormancy in fact offers a buffering period in times of difficulty. Yet market regulatory authorities have the right to punish, in accordance with law and regulations, any enterprise that claims to be dormant but carries out de facto trading activities during its dormancy, or conceal facts or cheat in the application for dormancy, or violate provisions articulated in the Letter of Commitment by Dormant Enterprises, and will place it under stricter supervision. Application for dormancy by such an enterprise will not be accepted within a period of three years.