Company chop in China is mandatory, and functions as the company’s official signature. Businesses use the company chop for all legal documents as it can cover almost all the functions of other chops, except for the customs chop and the invoice chop.
The company chop is required when any important document is signed, and can provide legal authority when opening a bank account or altering the name or business scope of the company.
Foreign-invested enterprises must produce the company chop after registering with the Administration of Industry and Commerce (AIC). The company chop contains the full registered name of the company in Chinese, and must be approved by the Public Security Bureau (PSB). The chop must be recorded by the AIC, PSB, and the company’s bank.
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Types of Chops in China
An official company chop is a necessity for doing business in China. In contrast to business places in the West, management and administrative teams in China use the chop to legally authorize documents, often in place of a signature.
Unlike practices in the West, a company’s official seal in China has legal authority over the signature of a legal representative and has the power to validate documents and contracts, regardless of who uses it. Its possession and whereabouts are therefore of utmost importance.
Other than the official company seal, a company must also have a legal representative seal, a financial seal, a seal for use on fapiao, and in the case of trading WFOEs, a customs seal.
A legal representative seal is used for specific license and certificate applications and banking documents, while the legal representative seal is square in shape and bears the name of the company’s legal representative.
The financial seal is used to validate financial transactions such as cash withdrawals, wire transfers, and bank checks. The company’s financial officer should keep possession of this seal separately from others, with a duplicate stored with the company’s registered bank for verification and anti-fraud purposes.
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