What Can We Learn from the Business License?

When a child is born, a birth certificate will be issued. When a company is incorporated, a business license will be granted. So, a business license is similar to a certificate of identification for a company, just like a birth certificate to a person. The day the business license is issued, is the day the company is officially incorporated. The company can proceed with other formalities, such as opening a bank account, tax registration, filing with the Ministry of Commerce, to have company seals made etc.

For those who deal with the company, the business license is equally important. Because they can glean from the business license all important information about a company. Let’s see what we can learn from the business license:

1. Unified Social Credit Code

The Unified Social Credit Code of a company is just like the ID number for any individual. Which is unique for each company and will be associated with a particular company from its incorporation till its official deregistration. It’s a set of codes consisting of 18 letters or numbers. It’s the same as the Taxpayer Identification Number (Tax No. for short). However, the purpose is totally different. The Tax No. is mainly for a company’s tax obligations, however the Unified Social Credit Code is an identity code for a company.

2. Company name

Many companies in China, have an English name, especially for export-oriented companies, which you can find on their business cards, their websites, their booths in trade exhibitions or E-commerce platforms. You can even locate them on the internet and social media via their English name. But do you think you could locate them in the same way as you do in the virtual world? If so, then you are wrong. One important thing you have to keep in mind when doing business in China is that, all official documents from the Government are issued in Chinese, and all documents you submit to Government need to be in Chinese, too. The business license is no exception, including all company information，except the name of the legal representative, which could be in English, if he or she is a foreigner.

So just remember, the only official name for a Chinese company will be the name in Chinese shown on its business license. A simple but important fact. It’s ok if you can’t read Chinese, but if you don’t know a company’s Chinese name, you can’t really claim to know this company.

3. Type of the company

Generally speaking, there are two types of business entities, one is the corporation, another one is the partnership. Since 1 January 2020, there are no more “WFOE” or “JV”. Now, all business entities with invested capital from foreigners are differentiated into corporations or partnerships, and enjoy the same treatment that is enjoyed by Chinese citizens, as long as their business does not fall under the scope of the negative list for investments.

4. Legal representative

For further information on the legal representative, please check our more detailed post: What is a Legal Representative?

5. Scope of business

The business scope refers to the operation and service that a company can engage in. The different type of operation is related to the different type of Fapiao a company is entitled to issue. Also, please bear in mind, for some operations, such as training, education and catering services etc., the entity has to apply for an extra administrative permission to be legally allowed to engage in such operations.

6.QR code

People can scan this QR code to login to the National Entity Credit Information Publicity system to know more about a certain company, such as its date of registration, filings, authorizations and supervision etc.

7. Registered Capital

For further information on registered capital, please check our more detailed post: What Does Registered Capital Mean? More about Registered Capital.

8. Date of incorporation

As said before, the date of incorporation of a company is the day its business license is granted.

9. Term

The existing term of the company, usually it’s indefinitely.

10. Address

The address here means the address for the headquarter in China or main office of the company. 

All this information has to be consistent with the company as a “going concern” and need to reflect the actual situation of the company. If any change occurs, the company has to file the change with the Administration of Industry and Commerce, and an updated business license will be issued accordingly.

Useful link:

MINISTRY OF COMMERCE OF THE PEOPLE’S REPUBLIC OF CHINA