A European multinational company has entered into a large sales order with a Chinese company, and the multinational company needs to set up a new company in China before a deadline date to sign the formal contract.

The multinational company quickly found a new office building in Shanghai and signed a lease contract, but the application document used as a registered address was returned by the Industry and Commerce Bureau because the registered address did not match the actual address.

After an in-depth investigation by the multinational company, it was found that although the owner provided the property ownership certificate of the building as a whole before signing the lease contract, the owner of the building deleted the 4th, 13th and 14th floors for the sake of auspice when setting the elevator floors, resulting in the 28th floor of the nominal floor on the lease contract being the 25th floor of the actual floor on the property certificate.

Although the multinational company re-signed the lease contract with the owner at the fastest speed, adjusted the expression of the registered address, asked the owner to issue relevant certificates, and arranged the headquarters executives to sign the application documents for submission, but finally did not get the business license of the new foreign enterprise before the limited date and missed the large business orders.

Dongjin’s Reminder:

Some building owners delete the numbers of the 4th floor, 13th floor and 14th floor when setting the elevator floor, or delete the room numbers of 4, 13 and 14 when the room is divided, but the adjustment of the above floors and room numbers has not been recognized by the local industry and commerce bureau, resulting in the company can’t be registered normally. Therefore, Dongjin reminds enterprises to pay attention to the above problems when signing the lease contract, or hire a professional third-party service agency for audit.

If the you have any further question, please contact Dongjin at any time.

Mike Chang

Partner

mikechang@shanghaiinvest.com