Due diligence with an OEM, distributor, or other potential partners in China (Part 2)
Tags: Company Verification, Due Diligence, OEM, SMBs and SMEs
Estimated reading time: 2 minutes
The “top three” things to check when you are considering a potential partner
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.
Here are the top three things you should check by conducting a due diligence:
- 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.
A legal expert can verify other things if you want to go deeper. Here are two examples:
- Does your potential business partner have all the qualifications and licenses required by Chinese laws and regulations?
- Are they involved in any serious unresolved litigation, especially concerning product quality and IP infringement?
Reduce your legal risk before going to arbitration. Have a legal expert conduct due diligence service and provide an insightful report. You will then know if a Chinese manufacturer, supplier, distributor, or business partner is legitimate and in good standing.
This article is provided by Mary Mao.
Ms. Mary Mao
Trustiics Recommended Lawyer
Senior Lawyer at Beijing W&H Law Firm Shenzhen Office
You can create a free account to hire Mary Mao to conduct due diligence or have her review your contracts.