Due diligence with an OEM, distributor, or other potential partners in China (Part 2)
The “top three” things to check when getting a due diligence
Due diligence helps evaluate a company’s credibility. It can therefore help assess your potential international business partner’s ability to fulfill their legal duties towards you.
Top three things to check:
- the registered and paid-in capital of the Chinese business partner
- whether this company is in the process of bankruptcy
- whether it has defaulted in repaying debt or has any outstanding court judgments.
If you’d like to go deeper, a legal professional can verify other things. Here are two:
- Does your potential business partner have all the qualifications and licenses that Chinese laws and regulations require?
- Are they are involved in any serious unresolved litigation, especially concerning product quality and IP infringement?
Contract review is also critical to your business and how we can help you protect your business with other partners. Here is a blog on “the Importance of contract review and legal document drafting services for international SMEs.”
Reduce your legal risk before going to arbitration. Order your Chinese Company Verification report today to ensure your Chinese manufacturer, supplier, distributor, or business partner is legitimate and in good standing.
Trustiics Recommended Lawyer
Senior Lawyer at Beijing W&H Law Firm Shenzhen Office