China company chops include finance chop, legal representative chop, contract chop, and invoice/fapiao chop, etc. Different from western countries, in China, the company chop is a necessity for doing business. The management and administrative teams use the chop to legally authorize documents, often in place of a signature. After registration, the company must carve chops and get the approval of the Public Security Bureau (PSB).
Types of Chops in China
1. Company chop
Generally speaking, Company Chop can be used for signing any documents that an enterprise agrees to sign for employee, government bodies, or other parties such as suppliers, customers etc. Company Chop is the most important chop in a company. All companies incorporated in China should have a Company Chop for the purposes of daily operations, investment activities or liquidation activities.
2. Finance chop
Finance Chop is an indispensable chop for opening bank accounts and issuing checks. Most companies also use Finance Chop for issuing invoices/Fapiao.
3. Legal representative’s chop
This chop is a personal chop of a company’s legal representative and it’s not a compulsory chop. The legal representative can also choose to personally sign documents or perform authorization. Most companies’ legal representative make a name chop so that they can approve payment or sign contract even they are not geographically available. Obviously, such arrangement may result in potential misuse.
4. Contract chop
Contract Chop is not a compulsory chop, particularly for those whose daily operations are simple. In small company, Company Chop is used for contract signing purpose. Contract Chop is specifically made for signing contract purpose. Contracts refer to the commercial sales or purchase contract.
5. Invoice/fapiao chop
Invoice/fapiao Chop is used for issuing invoice/fapiao. In China, invoice/fapiao without seal is not effective and therefore unacceptable. The Invoice/fapiao Chop’s function can be replaced by Finance Chop.
Who Should Have Control of Each Chop
1. Company Chop and Contract Chop
Normally, the Company Chop and Contract Chop is kept by the General Office (or General Manager Office). The general office should assign a person, i.e. chief assistant to the general manager/managing director/president, to keep the Company Chop.
2. Finance Chop
The Finance Chop is normally retained in financial department and CFO or financial manager is supposed to be the ideal person who should hold this chop.
3. Legal representative’s name chop
Apparently, it is the best scenario for the legal representative to personally keep his/her name chop. After all, this name chop represents the legal representative’s own responsibilities and rights. However, in practice, many legal representatives leave their name chops to their personal assistant, general manager or admin manager because this name chop is made for convenience purpose.
4. Invoice/fapiao Chop
Invoice/fapiao chop can reduce the misuse of finance chop. Because within the finance department, every financial staff may have requirement of using financial related chops, if there is only one finance chop serving all activities of the finance department, the risk of misuse of finance chop may be dramatically increased.
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