From an English Name to a Chinese Company: How to Find Who You Are Really Dealing With

The business card says "Shenzhen Bright Star Electronics Co., Ltd." The website says "BrightStar Tech". The pro forma invoice says "Bright Star Industrial Limited", with a bank in Hong Kong. None of these names appears in the Chinese company registry, because the registry records Chinese names only.

This is the first problem in almost every check I run for an overseas buyer. Until you know which registered Chinese entity you are dealing with, nothing else in a due-diligence report means much.

Why English names don't settle it

A mainland Chinese company has one legal name, in Chinese characters, and one 18-character unified social credit code. The English name on its website, its Alibaba storefront or its business card is chosen by the company and is not registered anywhere as a legal name. Two unrelated companies can use nearly the same English name. One company can use several.

That matters because a contract, a court case and an enforcement action all run against the registered Chinese entity. An award or judgment against an English trading name may be impossible to enforce.

Five ways to pin down the entity

1. Ask for it directly. Ask the supplier for its full Chinese name and unified social credit code, and a scan of its business licence. A genuine supplier will send these without fuss. Hesitation at this stage is itself information.

2. Check the licence against the national registry. Search the Chinese name or the code on the National Enterprise Credit Information Publicity System. The registered name, code, legal representative, address, business scope and status should match the licence exactly. A licence that shows a different address or legal representative from the registry may be out of date, or not the company's at all.

3. Match the website to the entity. Websites hosted in mainland China must carry an ICP filing number, usually in the footer. The filing is registered to a named entity, and a public lookup shows which one. If the ICP record belongs to a different company from the one that will sign your contract, find out why.

4. Match the bank account to the entity. The account that receives your payment should be in the name of the contracting company. A different mainland company, a Hong Kong company or an individual's account is common in practice and is sometimes legitimate. It is also the single most frequent route by which money goes missing. Get the relationship explained in writing and reflected in the contract.

5. Match the chop to the entity. A Chinese company's official seal carries its full Chinese name. On the signed contract, the name in the seal should match the registered name character for character.

What a match looks like

When the checks line up, you should be able to write one sentence in the contract: the seller is [Chinese name], unified social credit code [code], registered at [address], and it will be paid to an account in its own name. If you can't write that sentence, the gap is the thing to resolve before you pay.

When the answers don't line up

Mismatches are common and are not always a sign of bad faith. Many factories sell through a related trading company. Many groups use a Hong Kong company to receive foreign currency. The questions to answer are practical ones:

• Which company makes the goods, which one signs, and which one receives payment?
• Are they related, and how? Common shareholders or directors show up in the registry.
• If something goes wrong, which one will you sue, and where are its assets?

A short written statement from the supplier, and a contract that names all the relevant companies and their roles, deals with most of it.

What this check does not tell you

Confirming the entity tells you who you are dealing with. It doesn't tell you whether they can make the product, whether they are solvent, or whether the person you are talking to has authority to sign. Those are separate questions, and my other notes on supplier checks cover them.

Part of my guide to checking a Chinese supplier.

If you are about to pay a Chinese supplier you have not worked with before, send me its name and the order in outline. Ask about a supplier check →