Understanding Chops, Seals, and Signatures

Table of Content

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Introduction

Types of Chops

Signatures

Practical Advice

When doing business in China, it is critical to understand cultural differences as well as legal requirements. One feature that sets China apart from other countries is the use of chops, seals, and signatures for legally binding documents. If you are a foreign corporation looking to establish a WFOE (Wholly Foreign-Owned Enterprise) in China, you should become acquainted with the numerous legal methods used to authenticate paperwork.

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Types of Chops

There are several types of chops, each with a specific purpose, that are widely used in China for different business activities.

The official chop: also known as the company chop, circular or oval shape, is the most important of the three. It is used to represent the company in legal and official documents and must be registered with the relevant authorities. The design of the official chop is standardized, including the company’s name, address. English name is optional on the chop. Depending on the location, sometimes the chop can also have a chop filling number.

Legal Representative Chop: As the name suggests, this chop is the name-chop of the company’s legal representative and is linked to the specific individual. The legal representative’s name is typically found on the rectangular-shaped stamp, which is mainly used for banking purposes to represent the will of the legal representative.

Financial Chop: This chop is used in banking operations, primarily for issuing checks and verifying statutory documents. The financial chop ensures that financial transactions are properly authorized and recorded.

Contract Chop: While this chop is not compulsory, it is often used to sign contracts with employees and form binding agreements with clients and suppliers. The contract chop is used to delegate authority to managers who need to handle these matters without giving them access to the company chop.

Invoice (Fapiao) Chop: This is a mandatory chop for stamping invoices and tax receipts. Despite the ongoing digitalization of fapiaos, the fapiao chop remains an important tool for companies doing business in China.

Signatures

Signatures are used to verify the authenticity of documents and transactions, and they must be written in blue or black ink. It is highly recommended for foreign companies to seek the assistance of a professional consulting firm to ensure that their chops are properly registered and used.

Practical Advice

English name on a company chop is a common practice, especially for foreign companies for branding purposes. It is crucial to remember that registration of English Name with authorities is not required. However, if you prefer to have your English name on official chop, make sure it matches your bank account details. Commercial banks and customs, however, may, under certain conditions, examine the English name on chops. It is best to have both Chinese and English versions to ensure these entities have access to both.

Thinking of opening a company in China?

Click the button below to download our FREE China WFOE Guide PDF.

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