Conditions and Files Required for Registration of Group Company in Shanghai, China

Group company, established for joint actions out of certain purpose, refers to an enterprise legal person association jointly constituted by the parent company, subsidiary company, joint stock company as well as other members, which takes capital as the main link, parent company as the main body, and Articles of Association of the group as the common code of conduct.

In general, group company refers to a large-scale company that possesses numerous production and operation organizations. It generally operates huge assets, governs numerous production and operation organizations, and possesses its own rights and interests in many other enterprises. SMEsChina has posted a guidance for your reference: Group Company Registration

Conditions for establishment

Group without title of administrative division:

1. Parent company of the enterprise group has a registered capital of over RMB 50 Million Yuan, and possesses at least 5 subsidiary companies;

2. The total of registered capitals of both the parent company and its subsidiary company is over 100 Million Yuan;

3. Member units of the group all have the legal person qualification.

Group with title of Shanghai administrative division:

1. Parent company of the enterprise group has a registered capital of over RMB 30 Million Yuan, and possesses at least 3 subsidiary companies;
2. The total of registered capitals of both the parent company and its subsidiary company is over 50 Million Yuan;
3. Member units of the group all have the legal person qualification.

Catalog of materials to be submitted:

1. Application for Establishment of Enterprise Group signed by the legal representative of the parent company;

2. Certificate of the Assigned Representative or Jointly Entrusted Agent signed by the parent company;

3. Articles of Association of the group;

4. Files from the group members relevant to the application of joining the group and admitting the Articles of Association of the group;

5. Holding proof or investment certificate of the parent company over the subsidiary company;

6. Copy of business license of the group member.

Handling procedures:
1. The applicant shall apply to the registration authority for transaction of name alteration registration for the parent company of the group to be established, and collect Notification for Enterprise Name Alteration Pre-Approval;

2. Group parent company registered by the industrial and commercial branch (except enterprises in Pudong New Area) shall transact registration authority alteration, and change the registration to under the municipal industrial and commercial bureau; group parent company registered by the municipal industrial and commercial bureau or by the market supervision bureau of Pudong New Area shall directly transact establishment registration for the enterprise group in the original registration authority;

3. The applicant shall jointly submit the materials for applications of both enterprise group establishment and group parent company name alteration, and collect receive voucher;

4. The registration authority shall make decision whether or not to approve the registration within 5 days after receiving the materials; if verification needed for the application files and materials, it shall make decision whether or not to approve the registration within 15 days after the day of acceptance;

5. If the registration authority decides to approve the registration, the applicant shall collect the group registration certificate in the registration authority within 10 days.

Approval term:

1. The registration authority shall make decision whether or not to approve the registration within 5 days after receiving the materials; if verification needed for the application files and materials, it shall make decision whether or not to approve the registration within 15 days after the day of acceptance;

2. If deciding to approve the registration, the registration authority shall issue the group registration certificate within 10 days.

Major characteristics:

1. The substantive characteristic of group company is: a kind of vertical organization system based on mother-child relationship. Group company is a limited liability company or corporated company that possesses independent legal person qualification, and is established by adopting the legal person property system. Group company is the core enterprise of the enterprise group, generally the parent company, and possesses independent and limited civil liability.

2. Group company is composed of one parent company and several subsidiary companies. From the legal aspect, parent company is the group company, while it also includes several subsidiary companies and affiliated enterprises. Among which, subsidiary company refers to the subordinate enterprise of which the parent company takes the absolute holding position (holding over 50% shares generally); affiliated enterprise refers to the shareholder enterprise of which the parent company only takes general holding relationship, as well as enterprises with which the parent company has all kinds of fixed cooperative relationship. In a word, there shall be only one parent company, but there could be several subsidiary companies or affiliated enterprises.

3. From the view of internal organization relationship, parent company of the group company takes equity and property as the link, and vertically controls its subordinate enterprises. It includes: wholly-owned subsidiary with possession of all property relations (the parent company holds 100% shares, also referred to as branch); holding subsidiary company with possession of over half of the equity (the parent company holds 51-99% shares); shareholding affiliated enterprise with possession of certain proportion of shares (referred to as quality shareholding subsidiary company if holding 25-50% shares, and arbitrary shareholding subsidiary company for holding less than 25% shares. Under such condition, the group company could not be called as parent company). In general, the subsidiary company shall not hold equity of the parent company.

4. Group company has a comparatively clear property relationship. Group company is generally transformed through continuous development and expansion of the original initial company, which would internally establish branches through investment, and externally merge and control other competitors or relevant enterprises through capital stock market. Thus, there is a steady and tight relationship between the parent company and the subsidiary company.

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