One of the first matters to deal with when establishing a company in China is obtaining the company chops (stamps). In order to validate a document and make it legally binding in the name of the company, merely a signature is not sufficient – an official stamp is a must.

What are these company chops, why are they important, and how do they work?

Company chops are stamps issued by the government to all entities in China as the official entities’ recognition and approval of the documents it stamps on.

Each entity has several chops made for a different purpose:

– Company chop

– Finance chop

– Legal representative chop

– Custom chop

– Contract chop

– Invoice chop

PROPER HANDLING & MINIMIZING BUSINESS RISK

With the relevant company stamp, any document will be legally binding. It could pose a certain level of risk for the company as whoever has access to the chops is essentially able to create legal responsibility for the entity. Therefore, it is vital to monitor each usage carefully and establish control over the physical access to the chops. Either allocating dedicated staff or having an independent custodian to manage the stamps. A third party would be particularly helpful when the legal representative/high level executives are not residing in China or temporarily away.

 

STAR Accounting & Consulting is experienced in safe-keeping stamps for clients and adopts an online bilingual SaaS platform where clients can authorize each stamping occasion, track location and usage history. For more information on this platform, please click here.

 

If you are interested in our stamp custodian service or other services, contact Nancy Chen at Nancy@star-acc.com.

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