Doing Business in China: 5 Main Types of Company Chops

2020-07-20 16:12:43

It is mandatory for foreign-invested enterprises to produce company chops after registering with the Administration of Industry and Commerce (AIC). They contain the full registered name of the company in Chinese and must be approved by the Public Security Bureau (PSB). 1. Official company chop An official 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. The official company chop symbolizes the legal capacity of a legal person and has the widest scope of use among all the chops. It can be used on all letters, official documents, contracts, and introduction letters issued in the name of the company, certificates, or other materials. 2. Finance chop The finance chop is mandatory for opening a bank account, issuing checks, authenticating financial documents, such as tax filings and compliance documents, and for most bank related transactions. Although the company chop can often be used in its place, companies should keep their finance and company chops separate to avoid exposure to misuse. The chop must be recorded with the AIC, PSB, and the bank used by the company. 3. Legal representative chop The legal representative chop is a personal chop owned by the legal representative of the company. A company can only have one legal representative, whom is the main principal of the company identified on the business license and has the authority to enter into binding obligations on behalf of the company. Upon registration, it must be recorded with the AIC, PSB, and the bank used by the company. 4. Contract chop Many companies use a separate contract chop for signing contracts with their employees or executing agreements between salespeople and clients. This chop is not a statutory requirement, but it can serve in place of the company chop when used for contracts. 5. Invoice (fapiao) chop The invoice chop is mandatory for issuing official invoices and tax receipts (fapiao). A chopped invoice is required to declare a purchase as a business expense. Electronic chop An electronic chop is the digital equivalent of a given chop used for online transactions, including financial and contractual ones. The Electronic Signature Law of the PRC recognizes electronic signatures, including electronic chops to have the same legal status as physical chops.

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