---
title: "Seven Steps to Registering Your Company"
description: "This article provides a step-by-step guide for entrepreneurs on registering a company in China, covering key aspects such as choosing registered capital, finding office space, handling taxes and social insurance, and recruiting talent. It emphasizes practical tips and common pitfalls, drawing from the author's personal experience."
author: "New Distribution"
publisher: "New Distribution"
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published: "2014-05-09"
language: "en"
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# Seven Steps to Registering Your Company

> This article provides a step-by-step guide for entrepreneurs on registering a company in China, covering key aspects such as choosing registered capital, finding office space, handling taxes and social insurance, and recruiting talent. It emphasizes practical tips and common pitfalls, drawing from the author's personal experience.

More familiar with distributors than manufacturers, and better at internal management than distributors.
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Let's begin! Your project has successfully impressed investors and secured an investment intention. Congratulations! The first thing to do next is to register your company.
**1. How to register a company?**
After March 1, 2014, the new Company Law came into effect, which is a major boon for entrepreneurs because it no longer requires capital verification for company registration. In other words, registering a company now costs as little as 3 yuan. So, what else do you need to prepare? An office address. An office address refers to a property that is designated for commercial use on the property certificate; ordinary residential housing won't do. This brings up the first question: what to do about the company registration address?
I recommend looking into incubators. Basically, all startup incubators offer agency services for company registration. If they are state-backed, the fees are very cheap—around 300 yuan covers everything. You only need to provide a few basic documents, and it's very hassle-free.
Here comes the first pitfall: what should the registered capital be?
**2. What should the registered capital be?**
Suppose you receive an investment of 1 million RMB. Should the registered capital be written as 1 million? Well, that's what I initially wrote, and it turned out I was wrong. The Company Law stipulates that registered capital must be paid into the company account by the initial shareholders according to their shareholding ratios. For example, if three of you start the company with share ratios of 60%, 20%, and 20%, and the registered capital is 1 million, then before the investor injects funds, you three would need to deposit 600,000, 200,000, and 200,000 respectively into the company account.
Of course, if you have a wealthy father or father-in-law who can lend you 1 million to pass through the company account, that's fine. Otherwise, note that you should register capital of 100,000.
This 100,000 can be lent to you personally in advance via a bridge loan agreement with the investor, and then you deposit it into the company account to start urging the remaining 900,000 to arrive.
What if you've made the same mistake as I did? Then you'll have to go through the capital reduction procedure at the industry and commerce bureau, which takes 50 days. This means the remaining investment will be delayed by 50 days, which can be critical in many cases.
**3. Once the company is registered, where do you work?**
Many people instinctively choose to work in residential housing because the team is small and it saves money. But I recommend going to an incubator. For the first six months, incubators typically charge around 600 yuan per seat per month. For three people, that's 1,800 yuan per month. At first glance, it seems expensive, but let's do the math. Not to mention utilities, internet, and cleaning staff, what does a newly established company need most? Talent!
Imagine you're coming for an interview: you go to a residential complex, climb the stairs, knock on the door, and have the interview in a bedroom. Now imagine walking into a tech-savvy office (most incubators have great office decor) surrounded by vibrant entrepreneurs. How does that feel? Which company would you choose?
Not to mention that in an incubator you can also interact with peers and broaden your horizons. Everyone knows the meaning of the idiom "working behind closed doors."
**4. How to handle tax filing and social insurance?**
As someone with a technical background, my head spins at the mention of this—it's all foggy and unclear. This is where the benefits of an incubator come in again. Feel free to ask the incubator staff to recommend a reliable accounting consulting firm that specializes in handling financial matters for startups.
Make sure to clarify with them the various receipts and deadlines you need to provide each month. Using company money and personal money are two different things; being proper can avoid many troubles. Generally, a reputable financial consulting firm charges around 500 yuan per month. Of course, I've also received calls from many financial companies offering services for as low as 100 yuan per month, but I didn't dare use them. Intuitively, financial matters shouldn't be messed with.
As for helping employees with social insurance, this involves signing labor contracts. First, handling insurance contributions for the company is quite troublesome. The company needs to open a social insurance account, run around various departments, and deal with relevant authorities every month. It can easily eat up a lot of time. Therefore, as a startup, it's best to find a human resources service company to handle it. I previously asked 51job; they charged 150 yuan per person per month with a minimum monthly fee of 1,000 yuan, which was too expensive. Later, a friend introduced me to a company they had worked with for years; they charge 100 yuan per person per month with no minimum, and they can help employees with various insurance and housing fund contributions.
The most convenient part is if you have employees working in other cities—like me, with one employee in Beijing and one in Chengdu—the service company can handle their contributions locally, which would be very difficult for us to do ourselves.
Additionally, such companies can provide formal labor contract and non-compete agreement templates. Don't search online; use theirs.
**5. When can you start spending money?**
Because I knew nothing, I waited until the company account was opened and the bridge loan was fully deposited before spending. In fact, you can start as soon as the company name is approved at the industry and commerce bureau. Everyone knows what an invoice is (many entrepreneurs with foreign backgrounds suffer at this step). Once the company name is confirmed, when purchasing hardware or online services, you can ask the vendor to issue an invoice with the company name, and these invoices can be reimbursed later.
**6. Where to recruit?**
Actually, the biggest challenge for startups is recruitment. From my personal experience, although the news keeps saying this year is the hardest for job seekers, I really don't feel it. I'm still struggling myself, so I can only share the channels I've tried; for the rest, everyone has to use their own wits.
Incubators usually have a shared recruitment account that can be used to post job openings on sites like 51job and ChinaHR. After posting, resumes come in quickly, but they're not very reliable—mostly mass applications. Most people don't know what your company does, so you can take a chance and sift through them.
Lagou.com, which claims to specialize in recruitment for internet companies, offers relatively more reliable resumes, but the quantity is limited. After about a week, no more resumes come in, and even if you repost new positions, no resumes arrive. So treat your first job posting carefully and write a good job description.
Dajie.com is mostly for graduates. If you have positions for graduates, this is a good place to find them. I looked for a visual designer here, received 12 resumes, interviewed three young women, but two found the office location too far, and one chose another company. Sigh, it's all tears.
Pipapai, a website I just heard about, is said to be another option. I planned to try it today, but the homepage wouldn't open. You can try it yourself.
**7. You should be able to pay salaries now, but what about part-time employees' wages?**
For full-time employees, it's easy. Ask the accounting firm to give you a salary calculation sheet. Fill in employee information and salary figures, send the sheet to the company handling your insurance, and they will calculate each person's insurance contributions. Then they'll send you a calculated sheet showing the actual net pay for each employee. You can transfer the money via online banking.
But what about part-time employees? Well, for the company, every expense must have either a labor contract or an invoice; otherwise, it could be suspected of misappropriating company funds. So what about part-time salaries? Consult your accounting service company and the insurance handling company; they will provide a solution. I can't explain it here.
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