When considering a potential business partner in China, ensuring their trustworthiness is quite important. However, when you’re thousands of miles away, it can be challenging to confirm their credibility. Before making any commitments or payments, it is highly advisable to engage in a thorough due diligence process, particularly if the offered price seems too good to be true. Here are two levels of due diligence you can consider:
1. Independent Due Diligence: Conducting due diligence without the cooperation of the target company involves gathering and assessing information from publicly available sources, all without their knowledge.
2. Cooperative Due Diligence: This level of due diligence requires the cooperation of the target company, as it involves obtaining specific information directly from them. We will focus on company name and company address in today’s video.
Understanding the Company Name: The first step in conducting due diligence is acquiring the Chinese name of the target company. All Chinese individuals and businesses have legal names in Chinese characters, and they lack official or standardized names in foreign languages. So, how can you obtain a China supplier’s legal name in Chinese? –
- Request Their Business License: You can simply ask the target company to provide you with a copy of their business license. This document typically includes their official name in Chinese characters. –
- Examine the Official Seal: Another method is to ask them to affix their official company seal on the proforma invoice. The official seal will bear the legal name of the company in Chinese characters. Once you have their company name in Chinese characters, you can proceed to verify the existence and standing of the company.
Finding the Company Address: In addition to the registered address, you can determine the actual business address of the company through public marketing materials, sales records and port of loading. If necessary, you can even arrange for on-site visits to these locations. These visits can provide insights into the company’s production capabilities, workforce size, inventory levels, and overall assets.
Conducting comprehensive due diligence in China is crucial to establishing a foundation of trust and reliability when considering business partnerships. By following these steps, you can minimize risks and make informed decisions regarding potential partners in this dynamic market. Stay tuned, and we will return with more information on the subject very soon. (TBC)