We’ve previously written about how to find out the name of the legal representative of a Chinese company via their business license. In that article, we briefly covered what a legal representative actually is:
“There’s a good chance that this person won’t be someone with much real authority in the management of the company. … It could be a mistake to demand contact with the legal representative or to require their participation in your communications with the company. In many cases this person’s role as legal representative is not immediately relevant to the management of the company and it’s perfectly legitimate that they do not participate directly in your business relationship.”
We’ve noticed that some other company verification providers claim in their reports that anyone who isn’t the legal representative “is not authorised to represent” the company in question. This statement is highly misleading. It is in fact the norm that you will not deal with the legal representative of a Chinese company.
Demanding proof that you’re communicating with the legal representative of a company is akin to demanding to speak to the CEO, founder or owner of the company. By the nature of the role, there is only one in the whole company and chances are that they are not on the sales or marketing team. Also note that ‘legal representative’ will not be this person’s job title. It is a legal responsibility that they shoulder, but probably does not impact their day-to-day duties.
So whilst it’s true that someone other than the legal representative cannot undertake highly formal legal responsibilities for the company, other employees may very much be authorised by the company to represent it in business. If someone is in sales, representing the company is the main function of their job.
The issue here isn’t that the term ‘legal representative’ is confusing in itself. The real source of confusion is that apart from the legal representative, a standard Chinese business license doesn’t give any other names of real people. A major motivation to verify a Chinese company via their official registration is to confirm that you’re actually dealing with someone you can trust. People want to get hold of an officially recorded name of a real person, so they focus on the legal representative.
Verifying the company by their official registration record confirms that they are a real company that exists, as well as a range of revealing details about them. However, it’s much harder to prove that you are genuinely in contact with this company, or that the particular person you’re communicating with is trustworthy.
Because of this, we frequently get requests from clients who wish to confirm that a particular person does actually work for the company they are interested in. In these cases, we can verify that the company in question is officially registered, and take a close look at their registration details to see what insight can be gained from those.
Confirming with total certainty that a client is genuinely in contact with that company or that a particular individual works at that company is impossible, though. One of our main principles in researching companies is that we do not contact the company being researched, in order to stay totally impartial and independent (we also do this to be discrete and avoid revealing to the company that we’re doing research on them). This rules out contacting the company directly to ask about the names of their employees. They could legitimately refuse to give this information out anyway.
Whilst the business license and AIC records of a Chinese company will only reveal the name of the legal representative, it is possible to get hold of other names through more involved research. The names of shareholders and the board of directors can nearly always be acquired by sending a lawyer to the relevant AIC to collect the records in hard-copy.
Again, it may be unreasonable to demand that all communication comes from a shareholder or director. Further approaches to reassure yourself in these circumstances are:
As you can see, there is no silver bullet for verifying a Chinese company or the person you’re communicating with. Background research is only one part of the process: verification, referencing, audits and inspections all play their part in doing business safely in China.
The first China high-tech zone was established in Beijing in 1988 at Zhongguancun Science Park.
Since then the number of national-level high-tech zones has increased rapidly and there are currently 169 zones located in 31 provinces.
As well as giving an overview, in this article we list and provide details of these China high-tech zones, including their focus industries and official websites.
Viewing information declared on a Chinese annual return is a useful method to learn more about a company from China.
As in other countries, Chinese companies are required to make an annual return to the tax authorities to report their business performance and financials, alongside other key details.
In this article we look at what information from a Chinese annual return is made publicly available by the authorities.
The Taiwan company registration form is a document completed during the application process for registering a new Taiwanese company.
If the application process is approved, authorities stamp this form and issue the company with a registration number.
When dealing with Taiwanese companies, requesting & verifying a copy of their Taiwan company registration form is a useful step to ensure that they are a legitimate business.