Business scope is an indispensable part of China company formation, which is not the same for western countries in most cases. It is the scope of business products and services you can engage in. It is a legal boundary for the enterprise to conduct business inside China legally. Once the scope of business is approved and registered, the enterprise shall have the right capacity within this scope, and the enterprise shall also assume the obligation of not exceeding the scope of operation.
Establishing a business in China does not necessarily mean you can engage in any kind of business activity, as is the case in most Western countries. Companies can only operate within a business scope approved by the registration and licensing authorities, and if you breach these, your company can either be fined, or in serious cases, have its license withdrawn. Accordingly, it is vital to determine what you want to do right from the start.
Significance of China Company's Business Scope
It is unfamiliar for many foreign investors that the business scope of your China company is closely related to invoices issue. In other words, the enterprises can only apply for the invoices under the specific business scope content. That is why to having a business plan is so important for your China company formation.
The Business scope could be categorized into Licensed business scope and general business scope. The general business scope requires no further approval while licensed business scope need further application.
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Business scope points out the direction of capital investment and the risk that the project already exists or may exist for investors. It also establishes the general scope of operation activities for the company and facilitate the professional development of the company's business activities.
Business scope is helpful for the company directors, supervisors, managers and other senior managers to recognize the future of the company's development and the direction of its efforts. It is conducive to establish and maintain certain administrative order and operation order to prevent the disorderly state of market competition.
Seeking Advice from Professionals
Defining your scope of business in China usually requires assistance from a professional firm familiar with China’s business laws and, for foreign investors, the “Foreign Investment Catalogue.” It is advisable to take professional advice and find a firm with a strong China presence that knows what it’s doing. Tannet can assist you in doing business in China.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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