How to know the registered capital of Chinese companies
One of the basic checks you can make on a Chinese company is to find out how much its registered capital is. Registered businesses in China must have a large amount of allocated capital in order to ensure that the company has sufficient capital and can operate in the manner described.
If you are considering doing business with Chinese companies such as manufacturers, it may be helpful to check the registered capital. However, you should be aware that the company may have grown considerably since it was registered. Since then, companies with a registered capital of 100000 yuan may become bigger. In other words, it seems that a small amount of registered capital is not necessarily a bad or suspicious thing.
You have to combine it with other information to make it interesting. For example, if the company seems to have little registered capital when it was founded, but claims to have a large number of employees and assets (such as large factories), you may find it strange.
So, how do you know the registered capital and other registration details of Chinese companies? You need to check its business license and compare it with the registration record.
Check the business license of the company
A Chinese business license will list the date of incorporation of the registered capital and other official information about the company. Please feel free to request a copy of the business license of the Chinese manufacturer.
When doing business with Chinese companies, this is a completely legal and universal requirement. If your manufacturer is not willing to show his business license, use other excuses instead of showing them, or try to claim that it is unnecessary, you should be more suspicious. A legitimate company should have no reason not to show you a copy of its business license.
After you get a copy of your business license, you may find that you have a headache when explaining it! Of course, all official documents in China are written in Chinese, so you may not understand the business license in China immediately.
The part describing the registered capital is as follows:
View company's public records
In addition to obtaining a copy of the company's business license, it is best to check their own registration records for comparison. The registration record will display the same information, and is generally accessible online if you know where to find it. You must find the AIC (Administration for Industry and Commerce) in the region where the company is located, and then search the AIC database for the company's public registration records. There are some problems in doing so:
l The whole interface and record are all in Chinese, of course. You may find it difficult to read them.
l The settings and quality of different AIC websites in different regions of China are very different.
l The public registration record may not be the latest version.
l If the company loses its business license or fails to renew it, the public registration record may not be deleted.
The last two are very important. In most cases, public registration records are up-to-date and have no problems. The problem is, it's not guaranteed. To ensure 100% security, you need to check your paper records (see below). After obtaining the information from the registration record, the information on the business license can be confirmed. If there is a difference between the copy of your business license and the information in the registration record, you may think it is suspicious. If so, we recommend that you ask the manufacturer questions.
Check the company's paper records
As we mentioned above, the public registration records provided online are really up-to-date, without any problems, but AIC can never guarantee this. They use their own systems to update public records in their own time. But what they have to do is make sure that the actual paper records in their office are up-to-date and accurate. To master this, we need to hire Chinese lawyers to ask for paper records in AIC office. Please note that only qualified Chinese lawyers (not foreign lawyers) can make this request, so if you need paper registration records, you must employ a lawyer's services.