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This article has been written to introduce our Chinese Company Ownership Charts - a popular element of our company verification reports.
Introduced as a feature in our "Pro" & "Full Scope" company verification reports since October 2017, these charts help clients to better comprehend a Chinese company's shareholding structure by providing a visualization of available ownership data.
Understanding whether you are dealing with a solely-owned business or a complex array of stakeholders can be vital information and is easily identified with our Chinese company ownership charts.
In each of our Chinese company verification reports we include a table listing the company's direct shareholders. For companies with a simple ownership structure this can be sufficient to give a full understanding.
But what about companies with corporate shareholders? Who owns those companies? Who are the ultimate beneficial owners?
Our ownership charts were developed to address these questions by providing a visualization of the company's ownership structure with multiple degrees of shareholders - allowing clients to dig deeper and get a more complete picture.
They are like a "family tree" of ownership which identify multiple levels of individual shareholders, corporate shareholders, offshore shareholders and even governmental shareholders.
The appearance of our Chinese company ownership charts varies markedly depending on the complexity of the Chinese company's ownership structure.
As the saying goes, a picture is worth a thousand words, so let's take a look at some examples.
As is shown in this example, many Chinese companies, particularly smaller ones, are simply owned by an individual or a group of individuals.
In such cases there are only "1st-degree shareholders" and the company's ownership chart is very straight forward.
In the above example, ownership of the subject company is split between an individual and a corporate shareholder. The corporate shareholder is subsequently owned by two "2nd-degree shareholders".
For this example the ownership structure is already getting quite complex. This example company has four 1st-degree shareholders, one of whom is a government body.
Included in the 2nd-degree shareholders are two companies registered outside Mainland China - one from Hong Kong, who we can get ownership information for, and one registered offshore, who we can't.
Each of the 3rd-degree shareholders are individuals. To calculate an individual's overall ownership of the subject company just multiply the percentages. E.g. "Zhen Xiansheng" owns 6% (50% * 40% * 30%) of "Beijing Yangpin Baogao Co., Ltd.".
I'm not going to try to explain this example ownership chart as it would take too long and hopefully our system will make sense to you by now.
If not, maybe the two points below will help to clarify.
When a Chinese company is wholly or partly owned by another company the question raised is "well, who owns that company?".
And if that company is also owned by another company, who owns that company?
We quickly realized that trying to explain the different levels of ownership is very complicated so have devised this concept of "Degrees of Ownership".
Occasionally we come across Chinese companies with extremely complicated ownership structures that would could literally take us days to research.
For this reason we limit the degrees of ownership which we guarantee to include in our Chinese company ownership charts. These vary depending on the report ordered:
As you can see our charts often need to include a multitude of information so we have devised a color scheme to identify different types of shareholders.
You can see what the different colors represent in the key below:
Chinese lab accreditation is managed by different accreditation bodies depending on whether the laboratory is located in Mainland China, Hong Kong or Taiwan.
When you are importing products from China, requesting test reports to demonstrate that the product meets necessary standards can often be critical, and it is important for compliance purposes that these test reports are issued by accredited labs.
In this article we introduce the different bodies responsible for managing Chinese lab accreditation and show you where you can search for a Chinese lab.
Last year we ran a simple experiment on our website to find out whether or not our audience trust Alibaba suppliers.
Thousands of visitors to our blog received the automated message from our live chat software "Just a quick question, do you feel that you can trust an Alibaba supplier?".
The 109 replies we received gave us some fascinating insights into the difficulties buyers face when deciding if they can trust Alibaba suppliers or not.
Has your business ever needed to check Chinese certificates for fakes or forgeries? If so, you are not alone.
Regrettably, it is quite common for some unscrupulous Chinese companies to use fake or altered certificates, unfairly tarnishing the reputation of the majority of companies that do the right thing.
In this article we introduce 5 techniques you can use to check Chinese certificates are legitimate, so you can steer clear of the companies that hand out fakes.