Header graphic for print
China Law Blog China Law for Business

Think You Have A China Trademark Or China Company? Check Again.

Posted in China Business

A loyal reader sent me an article this morning regarding a Chinese citizen who had fabricated his ownership in a US bank and used that fabrication to gain power in his hometown. This happened about a year ago so not sure why it was sent to me today, but the reader sent it with a request that we highlight “the fake service businesses that are all over China.”

I am not even sure what the reader means by fake service businesses all over China and I have an email out to him to clarify.  In the meantime though, I will write about the two fake service companies we see most often in our China law practice: the fake entity registration company and the fake trademark registration company.

Every few months or so we are retained by a foreign company (almost always a US-based company) to have us figure out what they have in in terms of a China company and about half the time, we have to go back to them and tell them that they don’t have a thing.  The big problem with most of the fake company registration services we have encountered is that they not only fail to register the company, as promised, they also run off with the registered capital. We also are sometimes asked to check on China trademarks and we are finding that about half the time the registration that was paid for was never done.  Our numbers are no doubt high because those who come to us already have suspicions, but if you have any doubts about what was done for you, it would certainly behoove you to find out.

Do you-all have any good stories to add?

  • Caroline Schroder

    This is a great heads up. My own clients have had well-grounded suspicions, luckily in advance: fraudulent company and trademark registration companies are a dangerous problem in China. I would advise any foreign company to be very cautious. Before doing business with a registration service, assume that it is a fraud until facts prove otherwise. The consequences of a fundamental mistake are too great.