Can an enterprise become a shareholder of a branch? What are the conditions?

Branches are generally not allowed to become shareholders. Branches do not have legal person status and independent property. The assets of a branch company belong to the assets of the head office and generally cannot participate in shares. Investors can only invest in the shares of the head office.

legal ground

Article 14 of the Company Law of People's Republic of China (PRC)

Companies can set up branches. The establishment of a branch company shall apply to the company registration authority for registration and obtain a business license. A branch company does not have legal person status, and its civil liability shall be borne by the company.

A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law.

Article 74 of the Civil Code

A legal person may set up branches according to law. Where laws and administrative regulations stipulate that branches should be registered, such provisions shall prevail.

Branches engage in civil activities in their own names, and the resulting civil liabilities shall be borne by legal persons; It can also be borne by the property managed by the branch company first. If it is insufficient, it shall be borne by the legal person.