China’s blazing ahead with cutting-edge tech in just about every sector you can imagine. Yet its businesses still rely on simple red stamps to make decisions official.
These company seals, commonly called chops, are mandatory for validating all official paperwork in China. The millennia-old system grants the chop-holder authority to control everything from employee management to financial transactions to company acquisitions.
It’s no exaggeration to say, “Who controls the chop controls the company.”
Let’s break it down.
Why Company Chops Matter So Much
Company chops are official stamps (also called seals) that Chinese businesses use instead of signatures.
Think of it this way: in the UK, you’d sign a contract to make it official. In China, you stamp it with your company chop. Without the right chops, you simply can’t operate legally.
These little red stamps pack a mighty punch:
- Documents stamped with your chop are legally binding
- They represent your company’s official decisions (not just an individual’s)
- Anyone holding your chop can potentially commit your company to agreements
- Once something is “chopped,” your company is on the hook for any consequences
The Must-Have Chops for Every Business
Different chops serve different purposes. At minimum, you’ll need to obtain:
- Official company chop (mandatory)
- Financial chop (mandatory)
- Legal representative chop (mandatory)
- Invoice chop (mandatory for issuing invoices)
| Chop Type | What It Does | When You’ll Use It |
|---|---|---|
| Official Company Chop | Your main legal seal | Contracts, official letters, government documents |
| Finance Chop | Controls your money | Bank transactions, financial paperwork, issuing cheques |
| Legal Representative Chop | Acts as your legal rep’s signature | Payments, some contracts, official approvals |
| Invoice Chop | Makes tax documents official | Invoices (fapiao), tax receipts |
Specialist Chops You Might Need
Depending on what your business does, you might also need these:
- Customs chop (for import/export businesses)
- Contract chop (optional but recommended)
| Chop Type | What It Does | When You’ll Use It |
|---|---|---|
| Customs Chop | Validates import/export documents | Customs declarations, import/export processing |
| Contract Chop | Specifically for business deals | Contracts with suppliers, clients or staff |
How to Obtain and Register Chops
You can’t just pop to the local stamp shop to get these made. Company chops must come from government-authorized providers only. Here’s what to do:
- Register your business with the State Administration for Market Regulation (SAMR)
- Go to an authorised provider to have your chops made
- Register your new chops with the Public Security Bureau
- Record them with your company’s bank
Many businesses find it easier to let their company formation agency handle this as part of their setup package.
Don’t Let Your Chops Fall into the Wrong Hands!
This is absolutely critical – whoever possesses your official seal wields significant authority over your business operations.
British chip maker Arm failed in its attempt to dismiss the CEO of its Shenzhen joint venture in 2020 because he had the company’s official seal!
When Arm announced, “you’re fired!” to the CEO, what did he do? He simply refused to accept it and issued his own company notice with the official stamp on it!
This completely cancelled out Arm’s attempt to get rid of him and gave him the legal right to keep running the China division! Don’t let this happen to you!
To Protect yourself:
- Only give chops to your most trusted staff
- Assign specific chops to relevant departments
- Consider using a third-party custody service
- Create clear usage procedures and keep detailed records
- Require multiple approvals for important documents
Can You Sign Documents Digitally?
Physical stamping documents in China can be a real hassle, especially for businesses operating from overseas or across multiple locations.
Good news though: digital stamps are becoming more common! These allow you to authenticate documents online without being physically present in China.
But here’s the catch – you’ll need to go through a separate application process to use them. It’s also worth noting that the software only runs on Windows, so you won’t be using these digital chops Mac!
