Factory ownership papers reduce the middlemen risk and fear!
Don’t be afraid to ask for ownership papers for the factory. If the factory has some excuse about why they can’t share with you who owns the factory or a business license, that’s a big red flag. They're obviously trying to hide something.
Example (ownership papers):
It may be awkward to go to the factory and just say “You’re telling me you’re the factory, but I don’t believe you. Show me your business license.” That can be a little bit awkward or even abrasive because that’s too direct.
So you might want to say “You’ve given me a great factory tour. You said you owned the factory. That’s great. However per our standard operating procedures, headquarter back in New York requires me to make a photocopy of your business license.” That’s an indirect way to ask the question without saying “I think you’re lying to me.” And if they fight it, if they won’t give you the business license or tell you who the ownership is, that’s a red flag.
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In future articles we’ll discuss other tactics to get the ownership papers or ownership information. Whether they tell that to you, or you find a back door to find out that information. For now my point is if the factory is standoff-ish about who owns the factory or they’re not willing to share with you the paperwork in terms of who owns it, that’s a red flag, and they may really just be middlemen!
More to come soon in our Middlemen series ...
Previous articles from our
Middlemen series ...
ABL Blog: Sr. Editor and Primary Content Creator: Michael J. Bellamy
Originally from Upstate New York, Mike moved to Asia in 1993 and is a China business advisor to both Fortune 500 companies and small businesses. Recognized as an expert on doing business in China, he has been interviewed by WSJ, CNBC, FT & Bloomberg.
A featured presenter on China issues at seminars, trade shows and corporate events across the globe.
Learn more about Mike and AsiaBridge Law at
https://www.asiabridgelaw.com/business-advisory-services/
Mike is the author of “The Essential Reference Guide to China Sourcing”
(available on Amazon).
