How to Read a Chinese Business Licence (营业执照): A Field-by-Field Guide

1. Why the licence is only a starting point

A Chinese business licence is issued by the market regulation authority and is required for every registered company. It is a standard document — useful as a starting point, but not by itself proof of capability or reliability: it tells you an entity exists on the public record, but it does not tell you whether that entity is solvent, honest, capable or still active where it claims to be.

The right way to use the licence is as the anchor for a cross-check. You read the fields, you search the official database, and you compare what the document says with what the supplier is claiming. When the two diverge, you have a question worth answering before you pay.

2. Unified social credit code (统一社会信用代码)

The key point is that the code lets you move from a scanned document to the live database. If the code on the licence does not match the official record — or if the official record shows the company is listed as abnormal or has pending litigation — the licence is not reassuring regardless of how professional it looks.

3. Company type (类型)

The most common types are:

• Limited liability company (有限责任公司 / 有限公司) — the standard form for small and medium enterprises, including both trading companies and factories.
• Joint stock limited company (股份有限公司) — a larger, more regulated form, usually for sizeable manufacturers or publicly oriented firms.
• Individual proprietorship (个人独资企业) or individual industrial and commercial household (个体工商户) — smaller operations; the owner bears unlimited liability.

The type alone does not tell you whether a company is a factory or a trader. What it does tell you is the legal liability structure. A buyer contracting with an individual household has a different enforcement profile than one contracting with a limited liability company with multiple shareholders and registered assets.

4. Legal representative vs real controller

The legal representative (法定代表人) is the person registered as entitled to act for the company. In practice this is often a founder, a senior executive, or even a nominee. The real controller may be someone else entirely — a parent company, an investor or a relative.

For a buyer, the legal representative matters because contracts and court documents will bind the company through that person. But the real control question matters for leverage: if the person negotiating with you has no ownership stake and no authority to make the factory move, your contract may be legally valid yet practically weak.

5. Registered capital (注册资本)

This is one of the most misunderstood fields. Overseas buyers often read a large registered capital as "this company is well funded". It is not. It is simply a declared commitment. For credibility, ask for paid-in evidence or bank references, and check whether the company has a history of honouring contracts.

6. Business scope (经营范围)

The business scope lists what the company is legally permitted to do. If the supplier claims to manufacture your product but the scope only lists wholesale, retail or technology services, the licence does not support the claim. That does not necessarily mean fraud — the actual production may run through a related entity — but it does mean the entity you are contracting with is not the registered producer.

One common point of confusion: a scope line reading "goods import and export" (货物进出口) does not prove a trading company. Manufacturers in China routinely hold their own export licence. The more relevant question is whether "production / manufacturing" of the relevant product category appears in the scope.

7. Registered address vs operating address

In China it is legal and common for a company to register at one address — a virtual office, an incubator, or an associated company's premises — while operating from another. A registered address in an industrial zone therefore does not prove a factory exists there, and a registered address in a city centre does not disprove manufacturing elsewhere.

The useful exercise is to compare the registered address with the operating address the supplier gives you. If they diverge, ask for a reasonable explanation and verify the operating address separately — ideally with a visit for high-value orders. Our guide on trading company vs factory goes into this in more detail.

8. Establishment date and operating period

The establishment date tells you how long the entity has existed. A company registered last month claiming decades of industry experience is not necessarily lying — the experience may sit with the founders or with another company — but it is a reason to ask which entity actually holds the experience.

The operating period tells you whether the licence is still valid. Most are long-term, but a short or expired period is a clear stop sign until renewed documentation is provided.

9. How to check the licence is real

Three practical steps:

1. Search the code. Enter the unified social credit code on the National Enterprise Credit Information Publicity System or a verified aggregator such as QCC. Compare name, legal representative, scope, status and any abnormal-operation flags.
2. Ask for a sealed copy. Request a scanned copy stamped with the company's official seal. A supplier that refuses or delays this basic step is worth questioning.
3. Cross-check against the contract. The name, code and seal on the contract should match the licence exactly. If payment is requested to a different entity, stop and clarify.

For evidence that will hold up across borders, a notarised copy is stronger than a scan. If the deal is high value or long term, notarising the licence and key documents may be worth doing before money moves.

10. Frequently asked questions