The financial statement of a Chinese company is generally used to show its financial strength. A company with a fine financial statement is less likely to break its capital chains or go bankrupt. Doing business with such a company has a smaller risk of property loss.
Some people may ask, can we tell the financial strength of an enterprise from its registered capital? The answer is you can’t. If you want to know the reason, please read this article on our website: About the Registered Capital of Chinese Companies.
However, a financial statement is private information, it is impossible for you to get it by yourself. The only way to get a Chinese company’s financial statement is to ask them to send it to you. And it is easy for a Chinese company to acquire its financial statement from its bank.
How can a Chinese company get a financial statement from its bank？
A company has to prepare:
- Legal representative Id card,
- Official Stamp,
- Special Financial Stamp,
- Special Stamp for Legal Representative,
- Business License
- Bank Account Opening Statement (original piece and copy)
- Tax Registration Certificate
- Organization Code Certificate (original piece and copy)
Besides, making an appointment with the bank online or by a phone call in advance is also necessary.
Process of applying for a financial statement.
Step 1. The company needs to determine the amount of money that it wants to put in its bank account.
Step 2. Set up a company bank account.
Step 3. Transfer funds to this bank account.
Step 4. If a financial statement of the moment is required, taking all the files I have mentioned to the counter and the staff there will help the company to finish it.
If a financial statement in a period is required, the company needs to go to the counter the day after the money is recorded and take all the files I have mentioned before.
Differences between the financial statement of the moment and financial statement in a period
Financial statement of the moment: to prove the company has such an amount of money in its account at this time, but there’s no way to prove whether this amount of money will still in this account after this time.
Financial statement in a period: to prove that a certain amount of fund is frozen in the account during a certain period of time. This means the company has control over this amount of money. This kind of financial statement can be more persuasive.
What does a financial statement of a Chinese company look like?
After finishing the application process, the company will get the financial statement like the following pictures.
You could find out the information about certificate number, name of the company, deposit date, time, account number, type, currency and amount on them.
How to find useful information on a financial statement
After receiving the financial statement, you need to check the name of the company, to make sure that it is from your Chinese supplier; check the date and time, to make it clear that whether this financial statement is the latest; check the frozen fund to confirm that this is a Financial statement of the moment or a Financial statement in a period. If all the above information is confirmed, you can judge the financial strength of the company by its fund.
In addition to financial statements, there is also some other information that you need to check before doing business with an enterprise, such as company structure & shareholders, intellectual property, related risks, customs registration information, business registration information, change records. If you want to know detailed information about a company, please contact us, we are willing to help you.