China business: new version of business license goes into to effect, improved format includes QR code

On 24 December 2018, the China State Administration for Market Regulation issued the Notice of Activation of the New Business License Version, Business and Industry Enterprise [2018] No. 253 (Notice 253). From 1 March 2019, entities approved by the registration authority for business registration, business amendments or reissue of a business license shall be issued the new version of the business license. Entities who have obtained the business license prior to Notice 253 may continue using the old version of the business license or apply for the new version of the business license.

The new business license version falls into the wider business administration reforms. Primarily, in 2014, the State Administration for Market Regulation Notice on the Issues Concerning the Activation of the New Business License for the State Administration for Industry and Commerce, Business and Industry Enterprise [2014] No. 30 (Notice 30) issued several reforms for the business license format. An important reform in Notice 30 was the standardisation of the 15 types of business licenses into eight uniformed A3 (420mm wide x W 297mm in height) formats.

The types of applicable formats are as follows:

  • Format A — legal entities
  • Format B — non-legal entities
  • Format C — partnership enterprises
  • Format D — specialized farmer cooperatives
  • Format E — sole proprietorship enterprise
  • Format F — individual businesses
  • Format G — domestic funded non-legal entities, branches of domestic funded non-legal entities, domestic entities, branches of foreign-invested enterprises, branches of partnership enterprises, branches of individual businesses, foreign (regional) enterprises engaged in production and operations activities in China
  • Format H — branches of specialist farmer cooperatives

Equally, in Notice 30, a QR code tailored to each entity has been added to the business license. The QR code records the entity’s registration number, project name and context, registration authority, date of registration and National Corporate Credit Information Disclosure System website.

Another significant business administration reform is the one integrated business license. Since 2015, company establishment was simplified through the incorporation of several licenses into one integrated business license with a unified social code. Prior to the reforms, several licenses were required to be obtained separately, whilst the current business license allows procedures to be simplified and streamlined. As a result, information is easily interconnected and shared across government bureaus (For more information on the integrated business license reforms, please see our previous post).

The 2019 version of the business license revises the business license format in pursuant to the aforementioned reforms. Specifically, standardisation and increased information sharing is significant in the 2019 version. Below we highlight the main takeaways from Notice 253.

New format size

The business license layout has been altered from the vertical A3 size to a horizontal A3 layout. According to Notice 253, the original copy shall be 420mm wide x 297mm in height and any duplicate copy shall be 310mm wide x 225mm in height.  However, there is no change to the eight versions of the business license, as provisioned in the 2014 reforms.

Printing

The original and duplicate copy of the business license shall be printed in accordance with the Business License Printing Standard 2019 Version. The original copy (figure 1) shall include the national emblem, border frame, title ‘Business License’, website address of the National Corporate Credit Information Disclosure System, seal of the registration authority and date.

Fig. 1
  1. Unified social code
  2. Business license
  3. QR Code
  4. Company Name, type of entity, legal representative, business scope
  5. Registered capital, date of incorporation, date of business operation, address
  6. Registration authority and date

QR code

An increased emphasis is added to the QR code to strengthen the connectivity between the business license and the National Corporate Credit Information Disclosure System website. The sentence “扫描二维码登录’国家企业信用信息公示系统’了解更多登记、备案、许可、监管信息” (scan the QR code to find more information on the company registration, filling, licensing and supervision within the National Corporate Credit Information website) is on the business license. Notice 253 notes such an addition to increase the following:

  • Encourage use of the QR code for all sectors to directly inquire about company information via the National Corporate Credit Information Disclosure System.
  • Further expand the important role of business license in society.
  • Build the foundations of market autonomy, departmental supervision and social co-governance.

Electronic business license

Upon the issuance of the new version of the business license,  an updated electronic business license is required to be simultaneously generated and deposited into the electronic business license library by all market regulation departments.

The current business license revisions pave the way to further steps for business compliance and company information transparency. Since businesses are legally required to visibly display business licenses and use of the QR code function is strengthened in the new business license, company information is more widely accessible for public use. For foreign companies doing business, easily acquired company information on the Chinese counterpart can assist in due diligence and may allow foreign companies to avoid involvement with fraudulent companies in China.

If you would like more information about business licenses in China or other related corporate matters, send us an email at talktous@horizons-advisory.com, and we’ll have a Horizons professional contact you.

Horizons Corporate Advisory helps clients solve complex problems, thrive and be inherently responsible in their business activities worldwide. The countries we operate in include Belarus, Belgium, China, Colombia, Costa Rica, Cyprus, Ecuador, France, Germany, Hong Kong, Indonesia, Italy, Lichtenstein, Luxemburg, Macau, Malta, Mongolia, Netherlands, Nigeria, Portugal, Russia, Singapore, Spain, Switzerland (French and German-speaking cantons), Turkey, United Kingdom (England and Wales) and the United States of America.

Please visit our website at horizons-advisory.com