Due diligence | 2023-12-17
Recent cases have shown that some exporters establish multiple companies with different names yet engage in the same business. These companies are owned and operated by the same team behind the scenes. We refer to this phenomenon as 'Shell Exporters"."Why do exporters not operate under a unified company and develop a strong brand, instead establishing multiple companies and creating various websites and Alibaba accounts? We have not investigated the reasons behind these Shell Exporters.However, based on our previous experience, these companies ......
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Due diligence | 2023-12-06
A supplier’s salespeople and the company’s website always confidently tell the buyer that their factory is strong, production capacity is sufficient, and the quality is high. However, if you delve deeper into some background information about this company, you may discover that the actual situation might not be as the company claims.1. Historical company namesRecently, while conducting background checks for our clients, we revealed that some companies are rebranding to eliminate trading elements from their names. They remove terms like “t ......
Due diligence | 2023-08-20
As we have always advocated, an additional step of background search can help us identify negative records that have a significant impact.Recently, while assisting a client with a name search, we discovered that the related company has significant issues that might affect its delivery capability, including shareholder disputes and integrity problems.The initial keyword was "LS (Shanghai) International." Soon, our analysts found the company corresponding to this English company name is LS (Shanghai) International Trading Co., Ltd. (龙汕（上� ......
Due diligence | 2023-06-04
As a service provider in company search services in China, our clients frequently ask us the following questions"I want to know whether the business of this company in China is legitimate?","Is this company listed in any blacklist?", and"Just need to know if it is safe to do business with this company."When answering the above questions, we always emphasize the importance of conducting a thorough company background check before engaging in business to determine whether it is safe to trade with that company.An in-depth background check can revea ......
Due diligence | 2023-05-20
Recently, our analysts assisted one of our clients in performing a background check on an electronics wholesale e-commerce site. The observations suggest the company operating this site might use a fake business license. Worse, its business license was already revoked in May 2022.The company shows its business certificate, tax registration certificate, and importer and exporter certificate on its website (https://saleholy.net/about). It discloses that the company's English name is Saleholy Electronics Technology International Trade Co., Ltd., a ......
Due diligence | 2023-04-11
In our last post, we explained why verifying a business license is not enough to avoid scams. Today our analysts noticed a real case in the news about the risk of fake business registration information.According to some domestic media in China, a few days ago, a private company named Guoheng Foundation Holding Group Co., Ltd. (hereafter “Guoheng Foundation”) updated its registration records to change its sole shareholder from a private company to several large enterprises owned by central governments and state-owned funds, such as State Pow ......
Due diligence | 2023-04-09
When doing business with suppliers, it's vital to ensure they are legitimate and trustworthy. One way to do this is to verify their business license. A registered Chinese supplier must have a company registration number (the social credit code). Using the social credit code to check the business license is easy and necessary.However, relying solely on this verification method may be insufficient to avoid supplier scams. In this article, we will explore why verifying the business license is not enough and what other factors to consider when eval ......
Due diligence | 2023-03-12
In our recent work assisting one of our clients in performing a public domain search on a potential supplier, the Knowaco team noted that the target company was using a falsified branding image on its websites. The questionable picture shows the target company's office building and front door. We further found various companies also use photos with the same building and front door but only change the company logo and name in the image.The actual company having this building and the front door is 3M Material Technology (Suzhou) Co., Ltd., which ......
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 showi ......
Due diligence | 2023-01-26
A shell company is often without active business and significant assets and is sometimes used illegitimately. Therefore, identifying a company's actual business is an essential due diligence procedure for safe trade.1. It lacks essential information in company search results.As the old saying goes, no news is good news, i.e., having no information means that alarming developments are unlikely. However, this does not apply to a company's background check or due diligence.If the information in the company search results is limited, it might indic ......
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