What should you know about the Business Scope in your Business License in China | SONG

The Business Scope refers to the production and service items that a company can engage in, and is a mandatory item when making an application for company registration.

Following the Notice of the General Office of the General Administration of Market Supervision on the Comprehensive Development of the Standardization of Business Scope Registration《市场监管总局办公厅关于全面开展经营范围登记规范化工作的通知》, the main points that need attention are:

1. From 1 April 2021, Nationwide Market Supervision Departments will fully carry out the work of standardizing the registration of business scope.
2. The business scope recorded in the business license is the

   main business activity items

   registered by the enterprise in accordance with the law and

   does not constitute a restriction on the business activities and business capacity of the enterprise.

3. Registration authorities should classify general business items and licensed business items based on the

   applicant’s

   choice of business scope specification entries.

4. The reform of the business scope registration of branches should be explored.

   The registered business scope items of branches should not be limited to those of the controlling enterprise

   , and the relevant civil liability of the branch should be undertaken by the controlling enterprise according to law.

5. For the new business and new industries that do not have normative entries in the catalog, the applicant may apply with reference to policy documents, industry customs or professional literature, etc., and the General Administration will unify to increase and amend the relevant normative entries and update the catalog.
6. The relevant departments should be promoted to reasonably standardize the use of enterprise business scope information

   , to reduce the administrative mandatory requirements, restrictions, or disguised restrictions on the business scope of enterprises,

   to avoid obstacles to enterprises because of the adjustment of the business scope registration method.

The notice is to further implement the “Optimization of Business Environment Regulations” and the full-coverage reform requirements of the “Separation of Operation License and Business License“.

So how should the business scope of a new company be determined after the “Separation of Licenses”?

There are no clear regulations on how the business scope should be written for registration, and there is neither a word count requirement nor a category restriction. However, in general, the business scope should be as standardized and easy to understand as possible.

You can refer to the “National Economic Classification“ published by the National Bureau of Statistics, where you can find a more standardized language expression0

If you have any questions, feel free to contact us.