When establishing business operations in China, finding local business partners and customers can be a major task. On top of this challenge, how can you have confidence in the honesty and reliability of your potential partners? How can you verify whether companies really have the scope and capabilities that they claim? And if you find out that your intellectual property (IP) in China has been infringed how can you start to research the infringer? To help answer these questions, Reinout van Malenstein, IP Expert, China IPR SME Helpdesk, has put together some practical advice on conducting company searches in China.

Information on companies registered in China is publicly available and can be accessed via the electronic database of each local Administration of Industry and Commerce (AIC). This search can reveal, among other details, if the company is officially registered in China, who can legally represent the company and sign contracts on its behalf, what the business scope of the company is and where the company is located. A step-by-step guide on how to conduct this search is published on the website of the China IPR SME Helpdesk.[1]

Why should I do the search?

This search is relevant to any European Union (EU) small and medium-sized enterprise (SME) that is searching for, or is approached by, a potential Chinese business partner, or is dealing with a potential infringer of their IP.

Some examples of situations in which you should conduct a company search in order to find the officially-registered, basic information of a Chinese company include when:

• You want to produce in China and are looking for a Chinese manufacturer;
• You want to find a distribution partner to sell your products on the Chinese market;
• You want to license your technology to a Chinese company;
• You want to engage in research and development (R&D) with a Chinese company;
• You are considering entering into a joint venture or are considering investment via mergers and acquisitions (M&A); and
• You have discovered the name and location of a company that has infringed your IP, and you want to know more about that company, for example their address, information about their shareholders or the amount of their registered capital, in order to decide if you want to take action to enforce your intellectual property rights (IPR).

After the search

If the company is in the database, compare information

In order to verify the information that you have found online, you can ask your potential Chinese partner to send you their business licence for comparison. Every Chinese company has a hard copy of their business licence and reviewing it is common practice in China. A Chinese company that is serious about doing business with you and has nothing to hide will provide the document. Compare whether the business licence is the same as the registered information on the AIC website or if there are discrepancies between them. Also look for differences between the company’s officially-registered, basic information and the information you can find on its Chinese or English website, or even information that the Chinese company has provided via email. If there are any inconsistencies—for example, the name of the person claiming to be the legal representative or the business scope is different—it could be an indicator that something is wrong.

If the company is not in the database, visit the local AIC

Please be aware that the information on the AIC websites might not always be up-to-date or complete. After conducting the initial search, we highly recommend you contact a lawyer to conduct further due diligence. Chinese lawyers have permission to visit an AIC in person and to take copies of official registration records, including the business licence and the articles of association of a company. In certain cases, in order to get access to the AIC documents, the lawyer will require approval from the Chinese company whose records are being verified. Please bear in mind that in cases where a lawyer does not need approval from the Chinese company the AIC may still inform the company that a lawyer came to check their registered documents.

General advice

Please be advised that the online search will only give you a first indication with regard to the officially-registered, basic information of the Chinese company you conducted a search on. The information resulting from the search might not be up-to-date and does not in any way give you a comprehensive answer as to whether or not you should go into business with that company. Even if the company information matches, please still act cautiously. We highly advise you to consult Chinese experts to carry out complete due diligence, in accordance with Chinese law, of the Chinese company you want to interact with.

IP Specific

As a next step you can search for some IP-specific information on the company by searching the China Trademark Office (CTMO) database to find out if the company has registered any trademarks in the past and flag up any suspicious trademark registration behaviour. Suspicious behaviour may include registering multiple, different trademarks for a very wide range of products or cancelling multiple trademarks. However please be advised that conducting IP-specific searches should only be considered another tool as part of your overall due diligence, and is not exhaustive. For advice on how to use the CTMO database, please see the China IPR SME Helpdesk’s How to Conduct a Trademark Search Guide.[2]

At the time of writing, the English version of the CTMO database was offline. If the database is still offline when your company wants to conduct a trademark search, the China IPR SME Helpdesk will be more than happy to conduct this search for EU SMEs for free.

The China IPR SME Helpdesk is a European Union co-funded project that provides free, practical, business advice relating to China IPR to European SMEs. To learn about any aspect of IPR in China, visit our online portal at www.china-iprhelpdesk.eu. For free expert advice on China IPR for your business, e-mail your questions to: question@china-iprhelpdesk.eu. You will receive a reply from one of the Helpdesk experts within three working days.

[1] http://www.china-iprhelpdesk.eu/sites/all/docs/publications/How_to_search_for_company_information.pdf

[2] http://www.china-iprhelpdesk.eu/sites/all/docs/publications/China_IPR_Guide-How_to_Conduct_a_Trade_Mark_Search.pdf