How to name your company in China?

In China, the official name of a company consists of four parts: administrative region, designation name, industry characteristics, and organizational form. Firstly, the administrative region name includes different regions or cities where you register the company. Secondly, the designation name includes two or more Chinese characters. Thirdly, the industrial characteristic includes the name of the products, business, or industries such as trade, culture, technology, advertising, etc. Fourthly, the organizational form includes the limited company, liability limited company, RO, etc.

What does registered Capital Mean?

According to Company Law, registered capital is the fund all the shareholders contribute or promise to contribute to the company as they apply with local State Administration for Market Regulation (SAMR) for incorporation, and the amount of the registered capital will be listed in the company’s Business License. Generally, it is the Subscription Capital system, there is no time limit for fund injection now. It means that the shareholders can transfer the Registered Capital into Company’s Capital Account in 20-30 years.

How to fill in the company’s business scope?

The Chinese company law stipulates that an enterprise may not operate business beyond the business scope of the business license, otherwise it will face a fine. Therefore, you must first determine the main operations to ensure that the company can legally operate these industries. If you are unsure whether to do the added business scope, you can go to the State Administration for Market Regulation (SAMR) to ask the questions. That’s why the Chinese business scope is very important for your company.

What is the WFOE/WOFE in China?

Wholly Foreign Owned Enterprise (WFOE or WOFE) refers to foreign enterprises, corporations, economic organizations, or individuals that are 100% owned and capitalized in China by foreign investors. Thus, the WFOE doesn’t include the Joint venture enterprises, Representative Offices, or the branches of foreign companies, etc. Most notably, unlike the other investment vehicles in China, the unique feature of a WFOE is that the involvement of a mainland Chinese investor is not required. That’s why the WFOE is the most popular corporation for the Foreign Invested Enterprises (FIE).

What is the Representative Office in China?

Representative Office (RO) allows a foreign company to hire staff in China through their own legal entity. That means the RO is for the sole purpose of company representation. Starting up a RO in China is the fastest way to get an income at a lesser cost. However, not only the RO cannot part-take in any activities that cause them to gain returns, but also it cannot sign up any legal documents or charge a sales service fee from any customers.

What is the difference between the branch company and the subsidiary company?

• A branch company is a branch of the company. Although the Branch company has business qualifications, it does not have legal personality, and cannot independently assume civil liabilities. The civil liability is bared by the company that establishes the branch company. In addition, the name of the branch company has to set up a branch name in front, followed by the name of the company plus a branch location.
• For the subsidiary company, a certain amount of shares of a subsidiary are held and controlled by the parent company, but they have independent legal personality. In another word, civil liability can be assumed independently and externally according to law, but the parent company is not liable for the debts of the subsidiary company. The point is that the Subsidiaries can name themselves without adding the parent company’s name.

What should I do if the Registrated Capital cannot be paid after the capital period expires?

• If the company does not intend to continue to operate, it can directly deregistration or transfer.
• It is possible to extend the capital contribution period by amending the statutes; this method should be the most cost-saving, but it must be approved by all shareholders.
• Find someone to help advance the capital, and the registered capital will actually be paid.
• Shareholders who fail to timely contribute capital can be paid by other shareholders or transfer shares.
• Go to the State Administration for Market Regulation (SAMR) pre-filing to handle the change of capital reduction.

Can I use the English Company Name as the official name for company registration in China?

According to Article 8 of China’s “Implementation Measures for the Registration and Administration of Enterprise Names”, enterprise names should only use Chinese Simplified characters that conform to national standards, and must not use Chinese pinyin letters or Arabic numerals. Meanwhile, if the name of an enterprise needs to be translated into a foreign language for use, it shall be translated and used by the enterprise itself in accordance with the principle of text translation, and there is no need to report to the Industrial and Commercial Administration Departments for approval. In this way, there are often inconsistencies and frequent changes. As a consequence, Chinese Simplified is the only language in the official record of enterprise in the People of the Republic of China.