The Chinese company chop and signature is not a minor formality. It determines who can legally bind a business.
In China, the company chop often carries more authority than a handwritten signature. A contract stamped with a company chop or other company chops can be legally enforceable, even without the signer’s involvement.
Knowing when to use the company chop versus a signature is essential to avoid risk, disputes, and costly mistakes.
What Is a Chinese Company Chop?
A Chinese company chop is an official seal used to represent a company in legal and administrative matters. It functions as the company's formal expression of intent and carries binding legal authority under Chinese law.
The company chop exists because China relies on a stamp-based authentication system rather than handwritten signatures as the primary method of validating documents. When a document is affixed with the company chop, it is treated as an act of the company itself, not of the individual who applied it.
Unlike Western systems that prioritize personal signatures, the Chinese approach places authority in the physical seal. This is why the company chop is widely recognized by courts, banks, and government authorities as the definitive marker of corporate approval.
Types of Company Chops
Chinese companies typically use multiple chops, each serving a specific legal function. The official company chop is the primary seal used for major contracts and government filings. The contract chop handles routine business agreements, while the financial chop authorizes payments and banking transactions. The legal representative chop confirms the authority of the company's registered legal representative and is often used alongside other chops.
Authority and Usage
The legal representative holds ultimate authority over the company chop and remains responsible for every use. However, authorized senior management, designated administrative staff, or external service providers may use it within clearly defined limits and with proper approval. Once applied, the chop legally binds the company regardless of who physically stamped the document.
Validation
A valid company chop is typically circular, applied in red ink, and displays the company's full Chinese legal name. While some chops are registered with local authorities, unregistered chops can still be legally effective. Validation focuses on consistency with previous documents and proper appearance rather than internal authorization processes.
What Is a Signature in China?
In China, a signature represents the personal consent of the individual who signs, not the corporate intent of the company’s legal entity. Its legal effect depends on the authority granted to the signer rather than on any physical mark applied to the document.
A signature is usually provided by the company’s legal representative or another authorized individual acting on behalf of the company’s management. However, unlike a company seal, a signature does not inherently express corporate approval unless supported by internal authorization.
Signatures alone often lack authority in China because corporate intent is formally expressed through the official company chop, which is recognized by courts, banks, and the Public Security Bureau. This reflects a clear legal separation between a company chop and an individual signature under Chinese practice.
Differences Between a Company Chop and a Signature
The company chop and the signature play different roles in China, each with unique implications for authority and compliance.
Here is a description of the main differences between the company chop and the signature:
| Type | Signature | Company Chop |
|---|---|---|
| Authority | Linked to the person who signs as an individual, representing their direct consent or approval. | Represents the company itself. |
| Delegation | If certain documents must be signed by a designated individual, only that person can sign. | Can be used by designated employees, allowing operational flexibility when the legal representative cannot sign. |
| Compliance and Risk | Minimal delegation risk since a signature is tied to one identifiable individual. | Delegation is possible but may create compliance or internal control risks. |
| Legal Status | For company documents, the legal representative’s signature alone is typically not sufficient. | Often required together with an authorized signature when the company is the executing party. |
Company Chop vs Signature: Which One Should You Use?
The correct choice depends on the document and the authority required.
When a Company Chop Is Required
A company chop is required for contracts where the company is the legal party. It is also required for documents submitted to government authorities, banks, and regulators. Many institutions will reject documents that do not carry a company chop.
When a Signature May Be Sufficient
A signature may be sufficient for internal approvals, acknowledgments, or non-binding documents. It may also be accepted for low-risk agreements where the counterparty does not require a stamped document.
Industry-Specific Guidance
- Manufacturing and export businesses require company chops for contracts, purchase orders, and export documentation.
- Financial transactions typically require a company chop for banking, financing, and payment authorization.
- Technology and service companies may use signatures for international service agreements, but company chops are expected for local contracts and filings.
If there is uncertainty, use the company chop.
Conclusion
In China, a company chop has a decisive legal effect. A signature does not replace it.
Foreign companies must understand how chops are validated, when they are required, and how misuse occurs. Failure to control company chops can result in binding obligations the company did not intend to assume.
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