In Chinese business organizations law, a family proprietorship is a business registration option available to individuals or families. An individual must be at least 16 years old and permitted to work in order to register a family proprietorship. When a family applies for a family proprietorship, the dependents do not need to fulfill these requirements, and only the individual applying needs to have the ability to work. Chinese family law uses a system similar to the community property system popular in many American states. A family proprietorship has legal property rights, including possession, use, profits, and disposal of assets, and can make claims under statutes and contracts.

As of 2024, about 125 million family proprietorships have been registered in China, making it the most common type of business registration in the country. Over 20 million family proprietorships were registered in 2023. Chinese economic policy metaphorizes family proprietorships as “capillaries” that serve the country’s major “arteries,” employing over 300 million people.

Family proprietorships are registered following a statutory procedure. Currently, individuals and families may visit the local market oversight administration office to file an application, which is then subject to a regulatory review. Once approved, a business certificate is issued, granting the qualification to do business. Family proprietorships may carry on any business permitted by law, and the intended business activities must be listed as permitted business activities by the business regulator.

Family proprietorships enjoy most of the same rights accorded to companies, such as having a distinctive name, business seals, and a corporate bank account. Chinese business organizations law protects the distinctive name of a family proprietorship from misappropriation by others. A family proprietorship that lacks a brand name can use the owner’s name as the distinctive element of the business’s name, in which case the individual’s name will take on additional legal importance as a protected business name, beyond merely being a natural person’s name.

Further Reading

See our comprehensive resources on China’s Foreign Investment Law. and an overview of FDI regulation in our Foreign Investment Law FAQ.