Understanding the 8 Business Registration Statuses in China

In China, the Administration for Market Regulation (AMR) maintains a comprehensive business registration system. This system tracks each company's status, providing information about its operational health and potential risks. Understanding the eight critical business registration statuses can be crucial for making informed business decisions and assessing business opportunities.

1. Existing: Registered and in operation

This status indicates that the company is legally registered, operational, and engaged in normal business activities. It is also referred to as "opening," "normal," or "registered."

2. Active: Active and in operation

This status implies the company actively engages in production or business activities. Newly established companies may fall under this category even if they are only partially operational or undergoing trial operations. Variations of this status include "in operation," "normal," "registered and in operation," "effective," and "active and in operation.

3. Revoked: Revoked but not deregistered

This status indicates that the AMR has revoked the company's business license due to regulatory violations. To cease operations formally, the company must undergo liquidation procedures and complete the deregistration process.

4. Deregistered

This status signifies that the company has officially ceased to exist and no longer holds legal status.

5. Suspended

This status implies that the company has temporarily halted its production or business activities for specific reasons. The company intends to resume operations once the underlying conditions change.

6. Under Liquidation

This status indicates that the company is undergoing a comprehensive process of asset verification, debt collection, and asset distribution in accordance with its articles of association or due to dissolution, bankruptcy, or license revocation.

7. Transferred Out

This status signifies that the company has changed its registration authority and moved out of its previous regulating agency.

8. Transferred In

This status indicates that the company has changed its registration authority and moved into a new regulating agency.

Assessing Business Status and Risk

Among these eight statuses, 1 and 2 represent normal business operations, while 3 to 6 indicate abnormal business conditions that warrant further investigation and attention. Statuses 7 and 8 are relatively neutral but still require additional information to fully understand the company's actual operational status.

By carefully evaluating a company's registration status, investors, business partners, and other stakeholders can gain valuable insights into its financial health, compliance history, and potential risks. This information can inform decision-making processes and help mitigate potential liabilities.