For any international business eyeing China’s vast market, one question cuts through the noise: “Is this company legally alive and trustworthy?” The answer lies in a cryptic status code on China’s official business registry. Misinterpretation can lead to costly partnerships with defunct or penalized entities. Let’s demystify these critical status indicators on China’s Official Enterprise Credit Report (OECR).
Why Chinese Company Status Matters More Than Ever
China’s State Administration for Market Regulation (SAMR) mandates all registered entities to publicly disclose operational status via the National Enterprise Credit Information Publicity System (NECIPS). This status isn’t bureaucratic jargon—it’s a legal heartbeat monitor. Partnering with a company holding an invalid status exposes you to:
- Contract unenforceability
- Sudden supply chain collapse
- Financial liability risks
- Reputational damage from associations
(Source: Enterprise Information Publicity Temporary Regulations, 2024 Revision, Article 18)
Decoding the Critical Statuses: From “存续” to “注销”
The OECR lists statuses in Chinese. Here’s your essential decoder:
| Chinese Status | English Translation | Meaning & Implications |
|---|---|---|
| 存续 (Cúnxù) | Active/In Operation | Legally operating. Can enter contracts, sue/be sued. |
| 吊销 (Diāoxiāo) | Revoked | Business license forcibly cancelled by authorities due to violations (e.g., tax evasion, illegal operations). Operations illegal, but entity exists to settle debts/litigation. |
| 注销 (Zhùxiāo) | Cancelled/Dissolved | Voluntarily dissolved and deregistered. No longer exists legally. Assets liquidated, debts cleared. |
| 清算 (Qīngsuàn) | In Liquidation | Undergoing dissolution. Assets being sold to pay creditors. Cannot start new business. |
| 停业 (Tíngyè) | Suspended | Temporarily halted operations (e.g., restructuring). May resume legally. |
Real-World Risks: Why “Revoked” (吊销) Is a Silent Killer
Consider a European importer sourcing electronics from “Shenzhen TechGadget Co.” Their OECR shows 吊销 (Revoked). Key red flags:
- Cannot legally fulfill contracts or issue valid invoices.
- Bank accounts likely frozen; payments may be seized by creditors/regulators.
- Directors may face personal liability or market entry bans (Company Law 2024, Art. 178).
- No legal recourse for breaches—courts dismiss suits against revoked entities.
Case Study: A UK distributor lost $2.1M after paying a “revoked” Chinese manufacturer. Recovery was impossible as assets were seized by tax authorities.
Active ≠ Healthy: Beyond “存续”
An “Active” status is essential but insufficient. Cross-check these OECR sections:
- Penalty Information (行政处罚信息)
High fines or violations signal operational/legal risks. - Abnormal Operations List (经营异常名录)
Indicates failures in reporting, contactability, or disclosure. - Equity Changes (股权变更信息)
Sudden director/shareholder shifts may indicate instability.
How to Verify Status Accurately (And Why DIY Isn’t Enough)
While NECIPS is public, non-Chinese speakers face hurdles:
- Translation errors (e.g., confusing “吊销” with “注销”)
- Outdated data if reports aren’t real-time
- No context on historical penalties/restructuring
Solution: Rely on a verified Official Enterprise Credit Report (OECR). This includes:
- SAMR-stamped status with official English translation
- Real-time updates from NECIPS
- Cross-referenced penalties, equity changes, and liquidation records
Verify any Chinese company’s status with confidence →
Protect Your Business: Status Checks Are Non-Negotiable
In China’s dynamic market, a company’s legal status is the bedrock of trust. Never sign contracts, transfer funds, or ship goods without confirming:
- Status is “存续” (Active)
- No “吊销” (Revoked) penalties
- Directors/operations align with registry data
Global businesses mitigate risk by making OECRs the first step in due diligence. As one seasoned trade compliance officer notes:
“That unassuming status field has saved us from seven-figure mistakes. It’s the cheapest insurance policy in China business.”