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How can I determine if a supplier's business license or ISO certification are valid?

Posted: 2012-06-05

Full Question

I have followed some advice to help me verify the authenticity of potential Chinese manufacturers to do business with. In an email reply from a certain manufacturer, I received a copy of a Chinese business license, Product Quality Management (PQM) document and a statement claiming that they are not ISO (International Organization for Standardization) compliant right now. To start, I am not too happy that they are not ISO compliant. Also their Business license is not translated (except for two rows of Arabic numerals). Doing research I am lead to believe that companies must register not on a national level but on city level. Is this true? Also I have been researching a clear way to verify if a Business license is valid, but have found no concrete answers. If you could head me in the right direction I would greatly appreciate it.

Answer

Glad to see you are doing your due diligence on a potential supplier. It is so important!

Regarding ISO (International Organization for Standardization), all things being equal I go with the ISO certified suppliers. BUT I also respect the companies that have a plan to get ISO and are taking the time to train and really respect the ISO once they get it. Many firms think of ISO as a marketing tool and rush to get it, then don't respect the system once the poster is on the wall. So as buyers, we need to find suppliers who live the ISO system rather than just use it for window dressing. A supplier that doesn't yet have the ISO approval, but is working hard to train up, is better than a supplier that has ISO but ignores it.

It is correct that companies register on a city level to formalize the business, but certain approvals and licensing may need to go all the way up the chain to Beijing. But the cert you mention is most likely issued by the local government.

You asked about verification and I know the perfect people to help you. I would like to introduce Kevyn of CBI consulting in China (www.CBIconsulting.com.cn). He is from the USA originally and his firm conducts business intelligence, which may include verifying documents and/or taking an undercover look at a potential supplier to see if they are everything they say they are.

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