Chinese authorities plan to shut down the company founded by prominent artist and dissident Ai Weiwei.
Ai's legal consultant Liu Xiaoyuan said in a blog post Tuesday local authorities are pulling the business license of Beijing Fake Cultural Development because it did not follow annual registration requirements.
The company, which markets Ai's art, last week lost its final appeal against a $2.4 million tax evasion fine imposed by the Beijing tax bureau last year.
His supporters helped him raise $1.3 million of the fine, but Ai says he will not pay the balance of the fine, setting up a potential standoff with the government.
Ai, who speaks out about human rights via the Internet and his artwork, says the charges are politically motivated and intended to silence his political activism.
The artist spent 81 days in detention last year as part of a roundup of dissidents. His arrest sparked an international outcry. Since his release, he has been under constant guard and his movements severely limited.
His lawyer says it is not clear when the closure would take place or how it would affect the tax evasion fine.
Some information for this report was provided by AP and AFP.