Last week I was invited to a conference at a client’s office to discuss a new purchasing contract. Much to my surprise, the client’s office had moved since I had last visited. While this may seem a normal thing, what was surprising was this is the first time I had learned of the client’s office move. As the client’s China law firm, our office should have been contacted soon after the move so that we can make required filings to update the officially registered address of the company.
When asked, the client’s local manager informed me that the office location had moved at the end of September as the lease had expired and the company needed a larger office location anyway. Since the new office is only about a block from the old office, they thought it wasn’t necessary to involve our lawyers.
The address for the client’s company as stated on the new purchase contract and the Business License as provided to the vendor both were both the former address. I guessed that the client didn’t go through the required formalities to change the company’s registered address. The guess was confirmed by the manager, who said the company thought it is so close to the old address that there was no need to go through the tedious formalities to change the official registration.
However, in China moving a company is not as easy as moving into a new house (as if moving into a new house is easy in the first place!). For a China company, the officially registered address is a required registration item stated in the company Articles of Association, Approval Certificate, Business license and other important company documentation required by Company Law and Company Registration Rules. If the authorities discover that the registered address and actual business address of a China company are different, the company may face a fine from RMB 10,000 to RMB 100,000.
In addition, our client is registered as a manufacturing company. For a manufacturing company, a fire safety plan must be filed with authorities, and an environmental impact assessment must be conducted and approved by the local authority. If these are not updated, additional fines are possible!
When moving within the same local district, updating your China company address is relatively easy. In contrast, if the new location will be in a different administrative district the address change will require a financial audit of the company along with approval from tax authorities in the old and the new location.
Generally speaking, any company’s behavior should be strictly complying with relevant laws and regulations. This means updating your company’s registered address when you move! If you have questions just call our lawyers.