Useful Tools | What information can be read through the supplier’s business license?

By justchinait
 / 
October 28, 2020
 / 

As a purchaser, reviewing the qualifications of suppliers is an important part of our work. Do you know how to read the business license document? In fact, there are a lot of knowledge in the business license that we should understand. Today I will share with you how to interpret this corporate ID card.

1. Unified social credit code

On October 1, 2015, a unified social credit code was generated after the integration of the three certificates. The code is 18 digits and the composition law is:

Registration management department code (1st digit) + institution category code (2nd digit) + registration management agency administrative division code (3rd to 8th digits) + subject identification code (organization code) (9th to 17th digits) + check code (18th digit)

  • The first digit: the code of the registration management department, expressed in Arabic numerals or English letters. Most of the licenses provided by the suppliers we contacted start with 9, and 9 represents the administrative department of industry and commerce.
  • The second digit: institution category code, expressed in Arabic numerals or English letters. For example, the civil affairs department can use 1 for social organizations, 2 for private non-enterprise units, and 3 for foundations; for industrial and commercial departments, 1 for enterprises, 2 for individual industrial and commercial households, and 3 for farmers’ professional cooperatives.
  • Digits 3-8: The administrative division code of the registration management agency, expressed in Arabic numerals. For example, Beijing uses 110000, which is automatically generated by the system when registering, reflecting the location of the registration and management authority of legal persons and their organizations.
  • Digits 9-17: Main body identification code (organization code), expressed in Arabic numerals or English letters.
  • The 18th digit: check code, expressed in Arabic numerals or English letters.

2. Company Name

From the name of the business license, we can quickly read their administrative divisions, industries, and corporate organizational forms.

The common composition structures are as follows:

①Administrative division + company name + industry expression + organization form, for example: Inner Mongolia

Mengniu Dairy Co., Ltd.

②company name + administrative division + industry expression + organization form, for example Yili Suzhou Dairy Co., Ltd.

③company name + industry description + administrative division + organization form, for example Ruiting Network Technology (Shanghai) Co., Ltd.

Of course, there are some companies that do not have administrative divisions, such as Huawei Technologies Co., Ltd., which require separate applications.

Buyers can quickly determine whether their company is a incorporated organization or an unincorporated organization through the company name.

3. Types

According to the region of the investor, it is divided into domestic enterprises and foreign enterprises.

4. Residence

The registered residence is the basis for determining the jurisdiction of the enterprise registration authority and the basis for contract performance.

If the place of residence recorded in the business license is an economic development zone, etc., such enterprises generally register to enjoy some special policy preferences, etc., and the actual business address and the registered address are likely to be inconsistent. For such registered companies that may be “virtual” addresses, special attention should be paid to agree on the place of performance in the contract.

5. Legal representative and person in charge of business license

The business license records the legal representative who has the right to sign on relevant documents on behalf of the company. The signature is equivalent to the company’s official seal and is the legally authorized signatory of the company. The organizational forms of such companies are limited liability companies and incorporated companies.

Where the person in charge is recorded on the business license, the organizational form of this type of company is a sole proprietorship or a branch of a incorporated enterprise, belong to an unincorporated enterprise.

The business license records the executive partners. Such organizations are partnerships and belong to unincorporated organizations.

6. Registered capital

Since the implementation of subscription in China, shareholders not need to pay the registered capital at the time of registration. For purchasers, the registered capital can only be used as a reference, not as an absolute basis for judging the strength of the enterprise.

7. Operating period

The business period is the business time limit, from when the business starts to when it ends.

8. Business scope

The business scope is divided into main business and concurrent business. The main business and industry characteristics are consistent. For example, for a technology company, the main business are technical services, technology development, etc., and the concurrent business are sales, consulting, etc., such as business services, technical consulting, etc.

There is also a classification, which is divided into general business projects and licensed business projects. Generally, general business projects do not need to be approved, and business can be done after obtaining a license. Licensed business projects need to be approved. While verifying the company’s business license, the purchaser should also note that the relevant certificates of the company’s licensed business projects also need to be verified. For example, for food companies, the “food business license” must be verified after the business license is verified.

 

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