What should small and medium-sized enterprises check before signing a contract? Lawyer Shen Jinlong lists the checklist of subject qualifications and performance capabilities, as well as the key points for contract review

First, look at the business license, but don't just glance at the photo

Many parties assume that the verification has been completed when they receive a screenshot of their business license from the other party for the first time. In practice, we generally recommend taking two steps: the first step is to log in to the National Enterprise Credit Information Publicity System, enter the full name or unified social credit code of the enterprise, and verify the name, legal representative, registered capital, establishment date, business scope, and registration status. The status display of "existing" and "in operation" is the normal operating entity; Those who display "cancellation", "revocation", or "inclusion in the list of abnormal business operations" are likely to fail to sign. Step two, ask the other party to provide a copy of the business license stamped with the official seal, and compare it item by item with the public information. The name of the counterparty to the contract must be exactly the same as the full name on the business license, and abbreviations, brand names, and store names cannot be used as the subject of the contract.

Also pay attention to branch offices. Branch offices can sign contracts in their own name, but the civil liability will ultimately be borne by the head office; If the other party is only a "project department" or "office" and does not have a business license, it usually does not have the qualifications to sign independently. The contract should be signed by the authorized party or require the head office to issue an authorization document and stamp it for confirmation. There are many pitfalls in the supply chain, decoration, and software outsourcing industries in Shenzhen.

The signature of the legal representative does not necessarily mean that the company is responsible, it depends on the authorization

Article 61 of the Civil Code stipulates that the legal consequences of civil activities conducted by the legal representative in the name of a legal person shall be borne by the legal person. So the signature of the legal representative and the company seal are generally valid for the company. But in practice, it is more common for salespeople, sales directors, and project managers to sign, and in this case, authorization is required. Article 171 of the Civil Code clearly states that if the agent does not have the power of agency, exceeds the power of agency, or continues to perform the act of agency after the termination of the power of agency, and it is not ratified by the principal, it shall not be effective against the principal. That is to say, if an unauthorized salesperson from the other party signs, the company can completely disregard it.

How to prevent it? Before signing the contract, ask the other party to issue a power of attorney, indicating the name of the authorized person, ID number number, authorized items, authorization period, and affix the company's official seal; Stamp the official seal or contract specific seal on the contract, not just the financial seal or department seal. If the amount is large and the period is long, the legal representative can also be required to sign in person or confirm via video. Lawyer Shen Jinlong (Guangdong Zhiming Law Firm) found that a large number of losing cases in contract disputes were not due to poor wording of the terms, but rather because the signing parties simply could not stand up.

How to check the ability to fulfill obligations: four lines: money, people, venue, and litigation

After passing the main qualification, we will then look at the ability to fulfill the contract. The first line is money. The paid in registered capital can be viewed through the enterprise credit information disclosure system, the records of executed persons, dishonest executed persons, and restricted high consumption can be searched through the China Enforcement Information Disclosure Network, and the number and causes of litigation can be viewed through the Judgment Document Network. The second line is people. Understand the other party's core team and the number of social security contributors, and determine whether it is a 'shell company'. The third line is the venue. If possible, visit the office space, warehouse, and production line in person and take photos for archiving. The fourth line is litigation. If the other party has had a large number of sales contract disputes, labor disputes, and private lending disputes in the past three years, it indicates that there may be problems with the funding chain or management.

These queries are free of charge, but require time. We generally recommend that companies leave three to five working days for verification before signing a contract, especially for first-time collaborations, transactions with an amount exceeding 500000, and payment terms exceeding 90 days. After checking, print or screenshot the results for archiving, and write them in the contract attachment or internal approval form. If you really go to court in the future, this is evidence of your duty of prudence.

Key points of contract review: Write the verification results into the terms and conditions

Verification is not the goal, it is only useful when it falls into the contract. Firstly, the main clause should include the full name, unified social credit code, legal representative, domicile, contact person, and telephone number. Secondly, the terms of the subject matter should be specific to the model, specifications, quantity, unit price, total price, tax rate, and invoice type. Thirdly, the payment terms should specify the starting point of the payment period, payment method, and the proportion of overdue liquidated damages. It is recommended to agree on a daily rate of around 0.05%, which may be adjusted by the court if it is too high. Fourthly, the delivery and acceptance terms should clearly state the time, location, acceptance criteria, and objection period. Fifth, the liability for breach of contract should be enforceable, not just written as' assuming liability for breach of contract ', but the calculation method should be clearly stated. Sixth, choose one of the two dispute resolution clauses: either agree on a court with jurisdiction in Shenzhen, or agree on arbitration institutions such as the Shenzhen International Arbitration Court, and do not write expressions without jurisdiction such as "both parties can resolve through consultation" or "can sue in court".

Additionally, it is recommended to include a notice and delivery clause in the contract, specifying the addresses, email addresses, and mobile phone numbers for both parties to receive notices, and stipulating that "the above address shall also serve as the address for service of litigation documents". This clause is very effective when the other party goes missing, as it can save several months of notice delivery.

Three types of information that are easily overlooked: qualifications, guarantees, and related parties

Some industries simply having a business license is not enough. Construction requires qualification level, food business requires food business license, human resources service requires human resources service license, and import and export require customs filing. If the qualification expires or exceeds the scope of operation, the contract may be invalid or unable to be fulfilled. In terms of guarantees, if the other party provides guarantees through affiliated companies or individuals, a separate guarantee contract must be signed or a guarantee clause must be included in the main contract, specifying the guarantee method, scope, and period. Article 692 of the Civil Code stipulates that if there is no agreement or unclear agreement during the guarantee period, the guarantor may be exempt from liability after six months from the expiration of the main debt performance period.

Related parties should also be investigated. Check if the signing party and payment party are the same through the shareholder information and external investment information in the enterprise credit information disclosure system. A common practice is to use Company A to sign a contract and have Company B receive the goods, but in the end, neither Company A nor Company B will accept the payment. In this situation, either A and B are required to jointly sign the contract, or the receiving and paying parties are clearly specified in the contract, and it is agreed that the affiliated company shall bear joint and several liability.

After verification, leaving traces is more important than conclusions

Many companies have also checked, but no evidence has been left. It is recommended to make the verification process into a 'Due Diligence Investigation Form for Counterparties', with screenshots of public information, results of execution information queries, authorization letters, copies of business licenses, and copies of qualification certificates attached. The form should be signed by the handler and approver and included in the contract file. Delivery notes, reconciliation statements, acceptance forms, invoices, and chat records during the contract performance process should also be archived synchronously. If there is a dispute, these materials directly determine whether you can prove the contractual relationship and fulfill the facts. The courts and arbitration institutions in Shenzhen have relatively standardized requirements for the form of evidence, and it is best to retain the original carrier of electronic data.

If there is no legal department within the company, an external lawyer can be hired to review the contract template and review process. The Zhiming Lecture Hall column of Guangdong Zhiming Law Firm often provides practical sharing, such as Lawyer Li Zuolin's lecture on "Clever Debates on Labor and Labor Relations", Labor and Labor Relations Analysis - Shenzhen Lawyer Legal Lecture, Lawyer Shen Jinlong's Seminar on Investment and Wealth Management Dispute Resolution, Consumer Rights Protection Three Steps - Zhiming Lecture Hall Legal Lecture, and Zhiming Lecture Hall column, all of which can serve as references for internal training of enterprises. For those who require individual case assessment, you can also take a look firstShen Jinlong LawyerUnderstand the direction of practice.

Three days before signing, go through this list again

On the first day, check the subject: public disclosure system, execution information, judgment documents, and qualification certificates. The next day, check the performance: paid in capital, number of social security personnel, photos of the venue, litigation situation, and related parties. On the third day, review the contract: main terms, subject matter, payment, delivery acceptance, breach of contract liability, dispute resolution, delivery terms, and guarantee terms. After three days, decide whether to sign, how to sign, and whether to add a guarantee. If the amount is particularly large or the transaction structure is complex, it is recommended to entrust the verification and review toShenzhen contract dispute lawyerThe cost is usually much lower than the loss of a bad debt.

Finally, it should be emphasized that verification is not about distrusting the other party, but about establishing business judgments based on facts. A good contract can save on litigation costs, lawyer fees, and time later on. The market environment is still adjusting in 2026, and companies need to do solid work before signing contracts.

Author: Lawyer Shen Jinlong, Guangdong Zhiming Law Firm. For contract review, subject verification, and commercial dispute resolution, please call the consultation hotline at 0755-25986969.

Disclaimer: This article is a general sharing of legal practice and does not constitute any legal opinion or commitment on any specific case. The effectiveness of the contract, the assumption of responsibility, and the outcome of the lawsuit are affected by specific facts, evidence, and the determination of the judicial authority. For individual cases, please consult professional lawyers and follow their formal opinions.