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Knowledge and insights on company search and due diligence in China


Typical cases of companies that were put on the List of Subjects with Seriously Illegal or Dishonest Acts under Market Regulation

Typical cases of companies that were put on the List of Subjects with Seriously Illegal or Dishonest Acts under Market Regulation

Company law of China | 2023-01-29

1. BackgroundThe Administrative Measures for the List of Subjects with Seriously Illegal or Dishonest Acts under Market Regulation (the "List") has become effective since 1 September 2021. As early as 2014 to 2015, the State Council of China has already mentioned the backlist of companies with severe illegal and dishonest acts in specific regulations.This recent law has provided more explicit and comprehensive guidelines to strengthen social credit regulation and promote integrity.The results of being included in the List may consist of fines, ......

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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 showi ......

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How to conduct background check on a Chinese company if you only have its English name?

How to conduct background check on a Chinese company if you only have its English name?

Company search and compliance | 2023-01-26

A Chinese company does not necessarily have an official English name, as only a Chinese name is required by law for business registration, making it difficult to perform a background check if you are provided only with the company name in English.Some web articles may suggest you search the record of Registration and Filing Form for Foreign Trade Business (对外贸易经营者备案登记) in a system provided by the Ministry of Commerce of China.However, this method is outdated, as since 30 December 2022, according to amendments to the Foreig ......

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The four major types of companies and market entities in China

The four major types of companies and market entities in China

Company law of China | 2023-01-26

As a result of the country's efforts to streamline the process for starting a business, according to the data disclosed on gov.cn, the number of market entities in China increased to a record high of 150 million. Here we have summarized the four major types of companies and other market entities in China: 1. Companies and non-company legal personsCompanies in China include limited liability companies and companies limited by shares. (1) Limited liability companies (有限责任公司)In the names, a limited liability company must have ......

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Six characteristics of a company without an actual business

Six characteristics of a company without an actual business

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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