Group Registration

What is a Group Company in China

Group companies consist of several subsidiaries, joint stock enterprises, manufacturers, or other organizations. It is a consortium of enterprise ( numerous upstream and downstream resources ) and manages huge assets and implements diversification business strategies, through setting up subsidiaries to operate different industrial sectors, thus enhancing the competitiveness of enterprises.

Organizational relation:

Mainly adopts three systems:

  • 1. Unitary Structure ( known as the straight line staff system ).
  • 2. Multi-functional Structure ( known as decentralization system, centralized leadership and separate management ).
  • 3. Holding Structure ( multinational corporations through stocks and the board of directors to control and manage operations ).

Keywords of Group Companies:

  • 50 million registered capital
  • Holding 5 subsidiary companies
  • 100 million total capital
  • Limited or joint-stock companies
  • Independent legal qualification
  • Majority shareholding, >50%
  • Corporate name includes: Group
  • Different responsibilities, financial systems
  • Agreement by adding members

Views of Registering a Group Company:

View 1 Investment Capital

1. The group as a parent company, the minimum investment capital is 50 million RMB.
2. Group ( key enterprise ) and its subsidiary companies, the sum amount of total registered capital must be greater than 100 million.
3. An enterprise owned by the whole people as a key investor, the registered capital is also must be more than 100 million.
4. Majority shareholding means a parent company (group) holding shares (stocks of subsidiaries) more than 50%.

View 2 Subsidiaries and Corporate Types

A group company must include 5 subsidiary companies and absolute control the shares, a group’s corporate type can be a LLC ( limited liability company ), or a joint stock company registered by local market and supervision department(s). As an independent legal qualification has independent financial systems, and flexible system for adding and removing member(s).

View 3 Naming and Business Scope

As parent company ( group company ), you have to choose a brand name and as the end with: “Group”, “Group Limited”, “Group Co.,Ltd” or “Group Company” etc. About business activities, a group company also may select its own independent and available list.

View 4 Requirements and Requested Materials

1. Application for registration of establishment signed by the chief executive of the group company.
2. Documentary evidence of all members ( subsidiary companies ).
3. The articles of association of the group.
4. Certificated assets and investment capital.
5. Appointment documents of executive director and the board of directors, supervisors and senior managers.
6. Available and approved certificate of group name.
7. Certificates of Registered address of group office.
8. Joint agreements of members and certificates of shares.

View 5 Get the Green Light within 20 Workdays

Business license issued by a local market and supervision and administration bureau, a group company will obtain approval:

  • 1. Certificate of name approval.
    2. 5-in-1 Business license ( original and copy ).
    3. Chops ( stamps, seals ) of group company.

Whole timeline needs 20 working days processed through SMEsChina teams. If your Chinese group company needs to register import and export permits, corporate bank account, also needs an additional procedure with another 10 workdays with our assistance.

FAQs of Establishing China Group Companies

A cooperative conglomerate, all contributors ( shareholders and subsidiary companies ) enjoy an equal relationship and unified management under a parent corporation ( group company ). All members have several subsidiaries owned by independent systems. The association between strong enterprises with upstream and downstream resources to grow up together as a group Army.

Only one person (local citizen or nonresident) can be the executive director ( legal representative ). If your key structure needs to set up a board of directors, you have to appoint 3 people, at least to be the directors, no nationality restrictions. All directors appointed by members ( subsidiaries ) need to provide identity documents to market and supervision checking.

Your decision, a group company must open a basic account from local banks. And meanwhile, may open multiple general bank accounts for subordinate business, department(s) or other independent unit(s).

1st. Group company must prepare a separate settlement report and consolidated accounting statement.

2nd. Consolidated financial statements used only for shareholders, the public(s) and the government(s) have the rights to understand and grasp the group’s operating conditions.

3rd. Tax payments and accounting statements based on independent legal members within the group.

This is an excellent question, 3 points you have to understand.

1. No cross-shareholdings ( known as: no reverse holdings ) for parent-subsidiary corporations ( group company and subsidiaries ).

2. Separate liabilities for a group company and its subsidiaries.

3. If the parent company ( a group company ) pledged a guarantee, group company is responsible for the debts of their subsidiaries. This is a special circumstance.

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SMEsChina focus on the growth of enterprise and providing a variety of business solutions in the area of strategy consultancy, business registration, group company formation, finance and audit services, HR and payroll, corporate bank account, resident permit, immigration and visa, trademarks and legal compliance. If you have everything to set up a private business in Mainland China, you can get in touch with our teams to get more useful information and online guidance.

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