Entering China
Reporter: Yin Siyuan, Zheng Minghong
The shop is full of customers, and suddenly the building is empty; The merchant ran away with the money, leaving a pile of debts; Consumers go around defending their rights, but the money is returned in the distance, or they simply “can’t find anyone……
Behind the shady scenes of such incidents, there are often active “professional shopkeepers”. They collude with unscrupulous merchants and deliberately “maliciously close stores”, which not only harms the rights and interests of consumers, but also undermines market order and pollutes the consumption ecology.
Recently, the State Administration for Market Regulation formulated the “Implementation Measures for the Administration of Company Registration” officially implemented. This means that there is another important institutional guarantee to curb the evil of “professional store closures” and protect the rights and interests of consumers.
In recent years, industries with relatively concentrated prepaid consumption such as fitness, hairdressing, and art training have suddenly erupted from time to time. Some of the “runaway” incidents are ostensibly due to poor business management, but behind them there are often “professional shopkeepers” who act as tigers.
At the end of 2023, many stores of Meijim, an early education institution in Beijing, were suddenly closed. Parents who have no way to collect arrears have inquired in many ways and learned that there are “professional store closures” behind the scenes.
In March 2024, many stores of Gymboree, a well-known early education institution in Nanjing, were all closed overnight, and the advance payments paid by parents were swept away. According to media reports, there are also “professional shopkeepers” acting as accomplices.
In October 2024, the Beijing Municipal Bureau of Market Regulation and the Economic Investigation Corps of the Beijing Municipal Public Security Bureau announced the first case in the country to crack down on “professional store closures”. 2 closed enterprises, 3 intermediaries involved in the case, and 2 closed stores were placed on file for investigation, and more than 600,000 yuan was fined and confiscated.
The closure of enterprises was originally a helpless choice for poor management. However, with the emergence of “professional store closures”, they colluded with some illegal businesses, and the “store closure” turned into an illegal “business” that harmed consumers.
The means of “professional shopkeepers” to do evil are not complicated.
According to the relevant policy, a company only needs to provide relevant resolutions of the company to change its legal representative, and the company can apply to the market supervision department for the change of registration.
The “professional shopkeepers” have set their eyes on the loose restrictions on the change of the legal representative of the enterprise and the insufficient supervision of funds in prepaid consumption, and have started to think crookedly.
These “professional shopkeepers” colluded with the senior management of some poorly managed enterprises to complete the company’s change of registration by recruiting “debtors” to serve as the nominal legal representative, and then by submitting false registration materials and concealing important facts, so that the company’s original legal representative, Jin Chan, broke out of his shell, swept away the money, and left a pile of debts.
The newly implemented “Implementation Measures for the Administration of Company Registration” adheres to the problem-oriented approach, accurately treats the change of legal representative in the management of company registration, and makes up for the shortcomings of the system.
For example, Article 20 of the Measures stipulates that when there is evidence to prove that the applicant has abused the independent status of the company’s legal person and the limited liability of shareholders, maliciously transferred property, evaded debts or evaded punishment by changing the legal representative, which may endanger the public interest, the relevant department shall not handle the registration or filing, and the application shall be revoked.
At the same time, the chain of interests of “professional closed-shop” should be cut off by disciplinary measures. If a three-year credit punishment period is established, the person directly responsible for the false registration will no longer be accepted for business such as applying for registration again for three years.
Article 26 of the Measures also strengthens the constraints on intermediaries, if the intermediary knows or should know that the applicant has submitted false materials or uses other fraudulent means to conceal important facts for company registration, but still accepts the entrustment to handle the application on its behalf, or assists in the false registration, it will be punished.
All kinds of detailed measures and methods help to prevent malicious store closure from the source.
To rectify the “professional shopkeepers”, it is also necessary to focus on the general situation of standardizing prepaid consumption and form a joint force for the governance of the whole society.
In June 2024, the Supreme People’s Court issued an Interpretation on Several Issues Concerning the Application of Law in the Trial of Prepaid Consumer Civil Dispute Cases (Draft for Comments), which provides a legal basis for the trial of prepaid consumer civil dispute cases. In July of the same year, the Regulations for the Implementation of the Law on the Protection of Consumer Rights and Interests came into effect, which regulated the provision of goods or services by collecting advance payment methods, providing a legal basis for cracking down on “professional store closures”.
Including the newly implemented “Implementation Measures for the Administration of Company Registration”, a series of laws and regulations have been promulgated, which means that the institutional cage for regulating prepaid consumption is becoming denser and denser, and the rule of law to rectify “professional closed-shop” is more powerful.
To standardize prepaid consumption and rectify “professional store closures”, the focus is on managing the subject of charges and prepaid funds. Strengthen the management of prepaid consumption enterprises, and strengthen the review of their change registration; Strengthen the supervision of prepaid funds by speeding up the formulation of special regulations on prepaid consumption, and exploring the introduction of notarized deposits and deposits.
To promote the implementation of the system and make the law have long teeth and thorns, it is also necessary to do a good job in pre-review, in-process supervision, and post-event accountability, and strictly prevent malicious transfer of property and debt evasion, so as to effectively protect the legitimate rights and interests of consumers, promote market order to be more standardized, and make “professional closed-shop” have nothing to do.
