On October 22, Li Yingfeng from the Beijing Municipal Market Regulation Bureau held a press briefing in collaboration with the Beijing Municipal Public Security Bureau’s Economic Investigation Team to discuss actions against professional storefront closures that harm consumer rights. Following preliminary verification and evidence collection by the police, two art training institutions were found to be engaged in professional store closures. Upon receiving leads from the police, the market regulation department swiftly opened investigations into these two closed businesses, along with three involved debt mediation agencies and two individuals responsible for the closures. The investigations uncovered violations such as false registration and assisting in fraud, resulting in a total fine and confiscation of 655,800 yuan. This marks the first national case targeting “professional store closers.”
In recent years, many debt-laden companies, especially those that engage in advance payment practices, have entered into collusion with debt mediation agencies and professional closers when their business operations deteriorate or when they face financial crises. They pay a “closure fee” to these professional closers, facilitating a fake change of registration to position them as official shareholders or legal representatives, essentially rendering them the ostensible managers of the business and bearers of the company’s debts. This strategy allows the original investors to evade their financial liabilities.
The professional store closers either lack sufficient ability to settle debts or use the change in shareholders or legal representatives as an excuse to evade responsibilities towards consumers or employees (who may be owed wages). They often provide extremely unfair debt repayment offers or resort to transferring the company again or shutting it down altogether. As a result, consumers and other creditors find themselves in a vulnerable position, struggling to protect their rights.
Amid this situation, the Beijing market regulation authorities, with support from the police, intervened using administrative measures to regulate professional store closures. They successfully concluded the first national case against professional closers, pioneering a pathway for dealing with such behaviors. This initiative demonstrates their commitment and proactive stance against professional store closures, offering hope for consumer rights protection for those affected, while also serving as a strong warning to others.
The strategies employed by professional store closers involve submitting false materials and concealing important facts to gain business registration changes or cancellations. Such actions violate the principles of integrity and the law. According to the Company Law, violations that involve submitting false materials or using fraud to gain company registration can incur fines ranging from 50,000 to 2 million yuan. In severe cases, business licenses may be revoked, and responsible officers may face fines between 30,000 and 300,000 yuan.
The Implementation Rules of the Market Entity Registration Management Regulations not only regulate the submission of false materials but also stipulate sanctions for those involved in false registrations. It outlines measures to blacklist direct responsible persons and publicly disclose credit information, extending the scope of penalties to include agents and accomplices of fraudulent registrations. Such individuals who accept tasks knowing that false materials are submitted can be fined up to 100,000 yuan.
By lawfully addressing professional store closures, regulatory bodies have identified key entry points for oversight and reinforced their capabilities. Administrative measures focused on specific issues are more efficient, cost-effective, and effective in terms of deterrent power. This approach, which can complement litigation efforts, provides creditors with a broader range of tools for defending their rights. Using administrative measures to combat professional store closures should become a standard practice, and local authorities are encouraged to actively explore this strategy.
