Legal analysis: the establishment of branches is mainly due to the mandatory requirements of the state in taxation and industrial and commercial management. The company's business in other places has reached certain conditions. If it does not set up branches, it will constitute unlicensed operation. Our country has territorial jurisdiction over the company in industry and commerce and taxation, but the company's business activities cannot be limited to the place where the company is registered. For example, the company may go to other places to negotiate, sign contracts, deliver goods to other places, and collect money from other places. These are all business activities. However, the company cannot be required to set up a branch in the place where the contract is negotiated and signed in advance, nor can it be required to set up a branch in the county where the delivery passes. Because these activities will not make the operation of enterprises escape the supervision and management of industrial and commercial and tax authorities. If a company engages in production and business activities outside its place of registration, it needs to set up a branch and engage in related production and business activities on the platform of the branch.
Legal basis: Branch companies can be established in Article 14 of People's Republic of China (PRC) Company Law. 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.