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Five signs in the company search results that two companies are connected

Five signs in the company search results that two companies are connected

Due diligence | 2023-01-27

Theoretically, if two companies are connected, one may be a parent, subsidiary, fellow subsidiary, associate, or joint venture of the other, or both are controlled, jointly controlled, or significantly influenced or managed by another entity.

While the two companies have no connections in the shareholding chain, they are likely related by a preexisting business relationship or common interest. We need further analysis of company search results to identify such relationships.

Here we summarized some common hints in the company search results showing two companies might be connected.

1. The same contact person

Each company should have a contact person in the company profile at the State Administration of Market Regulation (SAMR). If the contact persons of the two companies are the same, it means the two companies may be controlled or managed by the entity or person.

But this sometimes happens if an agent handles the two companies' registration or annual filing matters simultaneously.

2. The same email domain of the two companies' contact persons

The two companies may be related if different contact persons share the same email domain, as two independent companies should have isolated corporate communication systems.

Sharing corporate emails is an obvious indication that the two companies have an existing business relationship for some common interests.

3. Having the same registered address

Company address is another dimension of analyzing the possible connections between two companies. 

If the registered addresses of both companies are the same, another party may control the two companies.

Please pay attention that sometimes one can write an address in different ways.

For example, "ROOM 802, XYZ Building" and "ROOM 2, 8F, XYZ Building" may refer to the same room.

So further verification might be needed for the adjacent addresses in the same building.

4. Same names in the management of both companies

Usually, the legal representative, directors, general manager, and supervisor are in the company search results. Affiliated companies may have the same names in their management members.

Social media search is a powerful tool for identifying the same management members. In a real case, in the news, we found the same person represented two companies when attending industry seminars.

5. The same ultimate controlling party

There is no doubt that the two companies are related if they have the same ultimate controlling person. 

Identification of the ultimate controlling party is not direct. Many procedures are needed, such as analyzing the shareholding chain, calculating the direct and indirect holding percentage, checking the background of related parties (corporate and individual), etc. 

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