In China, the official company seal or stamp is a symbol of corporate power.
This post was first published in CJO GLOBAL, which is committed to providing consulting services in China-related cross-border trade risk management and debt collection.We will explain how debt collection works in China below.
1. What is the Chinese company stamp?
Anything stamped with the official company seal is considered to be on behalf of the company’s will in China.
Because the official company seal is a symbol of corporate power.
In China, making official company seals is under supervision by the police. It would be a crime for anyone to make the company seals without authorization, and in the most serious cases, he/she could be sentenced to 10 years in prison.
The official company seal of a Chinese company can only be made by an institution designated by the public security bureau (i.e., a police station), and shall be filed with the public security bureau for record-filing. The seal is made with anti-counterfeit labels provided by the public security bureau, so that the public security bureau can identify whether the seal is genuine.
Most businessmen in China are aware that forging an official company seal is a crime. However, one cannot exclude the possibility that some Chinese companies may take advantage of foreign companies’ ignorance and use forged seals in cross-border transactions. Therefore, it is still advisable for you to examine the stamp.
2. What are Chinese company stamps like?
Generally, a Chinese company has several seals, including the official company seal, contract seal, financial seal, invoice (fapiao) seal, etc.
Among them, the official company seal is with the highest power, just like the lord of the rings, which usually can be used on any occasion. The contract seal is only used to affix the contract. The finance seal and the invoice seal are mainly used in the dealings between Chinese companies and banks and tax bureaus, which usually will not be affixed on the contracts.
The official company seal of a Chinese company is round-shaped, and the mark on the document is red. In the middle of the circle, there is a five-pointed star. Inside the circle, there is a string of Chinese characters above the five-pointed star, which is the company’s full registered Chinese name. Below the words, there is a string of numbers and letters (18 characters in total), which is the company’s unified credit code.
The following is a sample:
3. How to Use a Chinese company stamp?
(1) Stamping with the seal validates the contract
In China, the official company seal is a symbol of corporate power. Anything stamped with the official company seal is considered to be on behalf of the company’s will.
So, if you’re going to do business with a Chinese company, the contract has to be stamped with the official company seal. In this way, the Chinese court and law enforcement authorities will recognize that the contract is concluded by the said company.
(2) Checking whether the person you are communicating with can represent the Chinese company
A quick way for the person you communicate with to prove that he can represent this company and that this company really exists, is to ask him to stamp the company’s official seal on the documents you provide.
The person who has the right to use the official company seal is the actual controller of the company. If the person who negotiates with you on behalf of a Chinese company can’t get the controller of the company to stamp the contract with the official company seal, then he/she is highly unlikely to represent the company.
(3) Finding out a Chinese company’s Legal name
There is an extra advantage to having the Chinese company stamp its chop: you may get the full Chinese name of the Chinese company. Please see our previous post on why you should obtain the Chinese name of the Chinese company.
* * *
Do you need support in cross-border trade and debt collection?
CJO Global's team can provide you with China-related cross-border trade risk management and debt collection services, including:
(1) Trade Dispute Resolution
(2) Debt Collection
(3) Judgments and Awards Collection
(4) Anti-Counterfeiting & IP Protection
(5) Company Verification and Due Diligence
(6) Trade Contract Drafting and Review
If you need our services, or if you wish to share your story, you can contact our Client Manager Susan Li (susan.li@chinajusticeobserver.com).
If you want to know more about CJO Global, please click here.
If you want to know more about CJO Global services, please click here.
If you wish to read more CJO Global posts, please click here.
Photo by Benjamin Patin on Unsplash
Contributors: Meng Yu 余萌
