COVID-19: We are operating business as normal and stand ready to assist with your Chinese company verification needs.


Safer, Better Business in China

Opinions, knowledge and resources from China Checkup's expert contributors


Chinese Company Ownership Chart

Chinese Company Ownership Chart - An Introduction

by Matt Slater 16 May 2018

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.

What are 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?

 

Verify a China Company?

Order online & get peace of mind

Mainland China Company Verification Reports
Cost: from $129 USD
Turnaround: from 1 working day



 

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.

Chinese Company Ownership Chart Examples

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 we'll look at some examples.

To understand how they work though, it is a good idea to first understand our chart key:

Ownership Chart Key

Our charts often need to include a multitude of information so we have devised a numbering system to identify shareholder levels and a color scheme to identify the different types of shareholders.

You can see what the different colors represent in the key below:

Chinese Company Ownership Chart Key

Simple

  • Individual shareholders only

Simple Chinese Company Ownership Chart

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. 

Low Complexity

  • One or two corporate shareholders

Low Complexity Chinese Company Ownership Chart

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".

Medium Complexity

  • Several corporate, offshore or governmental shareholders

Medium Complexity Chinese Company Ownership Chart

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.".

High Complexity

  • A complex web of corporate, offshore or governmental shareholders

High Complexity Chinese Company Ownership Chart

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.

What are "Degrees of Ownership"?

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".

  • 1st-degree shareholders: entities/individuals directly holding shares in the subject company
  • 2nd-degree shareholders: entities/individuals holding shares in a 1st-degree corporate shareholder
  • 3rd-degree shareholders: entities/individuals holding shares in a 2nd-degree corporate shareholder
  • etc.

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:

  • Pro Verification: 1st and 2nd-degree shareholders
  • Full Scope Verification: 1st, 2nd and 3rd-degree shareholders 

Which Services Include an Ownership Chart?

The Ownership Chart feature is included in our Hong Kong Pro Verification, China Pro Verification and China Full Scope Verification reports.

 




Matt Slater
Matt Slater

Author

Hi there, I'm Matt, the Founder & CEO of China Checkup. Originally from the UK, I am now based in Brisbane, Australia.

Frustrated by the scarcity of concise, high-quality and timely information about Chinese companies, I setup China Checkup whilst living in Shanghai in 2013.

My team are proud that China Checkup's company verification reports have now helped thousands of clients from all corners of the world to do business in China more safely.

  



View These Related Articles

List of 100+ Informative China News Websites
List of 100+ Informative China News Websites
This article identifies over one hundred of the most informative English-language China news websites.  By regularly sharing news from China on our social media channels we have identified many good sources and thought i
Continue Reading
The 100 Largest China City Economies by GDP
The 100 Largest China City Economies by GDP
Do you want to know which China city economies are the driving force behind Mainland China's huge and growing GDP figures? As China's best-known cities, it came as no surprise that 2019 data popular in Chinese media iden
Continue Reading
10 Most Popular China Sharing Services
10 Most Popular China Sharing Services
Visit any Chinese city these days and you are bound to see rows and rows of brightly colored shared bicycles - they are the most visible of the many China sharing services. Whilst shared bicycles might be the most well k
Continue Reading

Also in Safer, Better Business in China

What are the 6 Different China City Types?
What are the 6 Different China City Types?

by Matt Slater 18 May 2020

This article takes a look at the 6 different China city types and the various levels of autonomy and power each type holds.

China has over 700 official cities, from the metropolises of Beijing, Shanghai and Hong Kong down to the smaller cities of Beihai, Shangrao and Qufu, but they are not all governed equally.

Read this guide if you want to understand the difference between China city types, including municipalities, prefecture-level cities, county-level cities and more.

Continue Reading

Chinese Economic Reform - Timeline of Key Events
Chinese Economic Reform - Timeline of Key Events

by Matt Slater 30 January 2020

Launched by Deng Xiaoping in 1978, the decades long process of Chinese economic reform has transformed China beyond recognition.

This article highlights some of the most significant events during this period in the form of a year by year timeline.

Continue Reading

China Business Podcasts
The Top 10 China Business Podcasts

by Matt Slater 09 January 2020

Listening to China business podcasts can be a great way to get insights on the Chinese market, pick up new knowledge and get fresh perspectives.

The great news is that there is actually a lot of great podcasts out there on this topic - and in this article I have chosen my current top ten.

These podcasts cover business in China from a range of angles - including tech startups, importing/sourcing, economics and more - so if you are interested in learning more about China business you are sure to find quality material here.

Continue Reading