What is a Business Scope Document?
What: The business scope document is the official record that indicates what products and services a Chinese company may produce or provide.
Why: Understanding the business scope document will help you ensure the company with which you are dealing is authorized legally to produce goods or offer services that you are procuring from them.
As one of the many documents that a Chinese company must supply, the business scope document ranks as one of the more important pieces of documentation. This document sets forth the approved list of services that the Chinese company can provide legally as indicated in its business registration documentation. The company may only produce products or offer services that are included in the Chinese business scope document; anything that deviates from that documentation is expressly prohibited.
A Chinese company’s business license is the first place to review its business scope. It will list the categories in which it is licensed and approved to conduct business, and often also will include exceptions. You should review this information carefully and never move forward with any transaction for which the Chinese company is not authorized to perform, produce, or provide. You should never engage with any company that refuses to provide a copy of its business license, or doesn’t include on its business license the product or service it is attempting to offer.
Chinese companies take great care when they develop and deliver their business scope documentation to the Chinese government. They must ensure that the scope strikes the right balance between breadth and specificity, giving them enough room for flexibility without constraining them with a too-narrow focus.
If your review of the Chinese company’s business license and scope passes the criteria we’ve outlined above, you can conduct an additional investigation of a Chinese company’s business scope against the public registration record. The State Administration of Industry and Commerce (工商行政管理局 – Gōngshāng Xíngzhèng Guǎnlǐjú) – commonly referred to as the AIC * – keep the official, publicly-available registration records for companies doing business in their jurisdictions. Do note, though, that maintenance and currency of these records vary widely among different AIC bureaus, so proceed with (some) caution when using these online services for verification.
Questions? We can help. At Nuna Network we offer a variety of valuable guides, tips, and other practical information to help you navigate the sometimes complex landscape with Chinese businesses. We remain the partner of choice for small- and medium-sized businesses seeking guidance in researching, developing, and launching relationships with companies in China. We are your go-to resource for valuable information in navigating the sometimes complex landscape of business operations in China. Explore additional introductory guides, lists, and how-to articles that we’ve developed to help you get started:
*Note: Within the next 12 to 24 months, this body will change to the State Administration for Market Regulation, or SAMR. Access the official Chinese site of this body.
Want to write for Nuna Network? Apply to create a guest post.