Q&A

A company’s business scope is a one-sentence description of the industry or industries it is authorized to operate in. It defines a company’s operations in China and is important because there is a large legal risk of disingenuously operating in an industry outside of a company’s business scope. Furthermore, the scope also restricts the activities a company can issue invoices for. If a company is found to be operating outside of its defined scope, this can greatly hinder its ability to issue official invoices (fapiao) to its clients therefore critically affecting various business transactions and relationships.