Understanding the Use of Company Chops in Hong Kong and China

A company chop functions as a company's rubber stamp. In Hong Kong, these stamps typically display the company's name in English and/or Chinese and are impressed using blue or red ink. This stamp is used to facilitate legal transactions and validate official documents, including contracts, certificates, and deeds, essentially serving the same purpose as a signature.

While not mandatory, some company chops may also include the business registration number. The standard design is usually round, although rectangular variants exist. The rectangular chop, often referred to as a signing chop, features the phrases “For and on behalf of” or “Authorized Signature,” along with a dotted line designated for a signature.

When conducting business in Greater China and Asia, the company chop is an essential tool. This article examines what a company chop is, its applications, and the significance of company chops in China.

Purpose of Company Chops in Hong Kong and China

As previously mentioned, a company chop is utilized by businesses to conduct legal transactions. It serves to authenticate and validate official company documents, letters, deeds, certificates, and records. In Hong Kong, a company chop often functions similarly to a signature. Given that the purposes of the chop and signature are alike, the use of a company chop is not always mandatory.

Consequently, the round chop is frequently employed in informal contexts, such as acknowledging the receipt of documents or adding a formal touch to invoices and other documents. While not legally required, many local banks and government agencies expect to see a company chop on specific forms or applications, such as those related to visa sponsorship or when applying for a business bank account.

When a chop is required, the rectangular signing chop is typically stamped in the designated signature area, indicating that the individual is signing on behalf of the company. Failure to use the appropriate chop may result in personal liability for the signatory.

Purpose of Company Seal

In addition to the company chop, there is also the common seal, commonly referred to as the company seal. This metallic seal is engraved with the company's name and is utilized to stamp essential company documents, indicating that these documents have been certified by the company's board of directors, sole director, or other decision-makers.

The common seal is often applied to share certificates and documents executed as deeds. As of 2014, the use of a common seal is no longer mandatory for businesses incorporated in Hong Kong; however, as a business owner, you have the discretion to choose whether utilize it or not.

Is Company Chop Necessary ?

Most countries around the world do not mandate the use of a chop. In Hong Kong, company chops are not legally required under the Companies Ordinance, as most documents can be executed with a signature alone, rendering the chop optional in many instances.

In contrast, company chops hold greater significance and official value in mainland China, as these chops are registered with the government. For Hong Kong-based companies engaging in business with China, it is highly recommended to obtain a company chop. This will help prevent complications and provide the legal authority to validate documents, decisions, and transactions.

 Types of Company Chop

There are multiple types of chops besides the official company chop. Each has a different function and is used on different types of documentation.

1. Financial Chop: The financial chop is employed for various purposes, including opening a bank account, authenticating financial documents (such as tax filings), issuing checks, and conducting most bank-related transactions. While the financial chop is mandatory, the company chop may be used in its place. It is essential for the financial chop to be registered with both the Public Security Bureau (PSB) and the company’s banking institution.

2. Contact Chop: A separate contract chop is commonly utilized for signing agreements with employees or contracts between sales representatives and clients. Although a contract chop is not a statutory requirement, it can serve as a substitute for the company chop when used in contractual contexts.

3.  Official Company Chop: The official company chop is essential for signing any important document and is the most widely used stamp among all types.

4.  Electronic Chop: Electronic chops represent the digital version of traditional chops and are utilized in online transactions, including contractual and financial agreements. Given the rapid advancements in technology, it is crucial to stay informed about regulatory updates to ensure ongoing compliance.

5. Invoice Chop: The invoice chop is required for issuing official invoices and tax receipts (fapiao). To classify a purchase as a business expense, the invoice must be stamped with the invoice chop.

6. Customs Chop: If your company is involved in cross-border trade, the customs chop is essential. It is utilized for customs declarations related to the import and export of goods.

How can BRASIA help ?

As part of our company incorporation services, we can assist you in obtaining your company chops in both Hong Kong and China, as well as facilitate offshore incorporations.

BRASIA can support you in registering a business in Hong Kong and/or China. We guide you through each step of the process, ensuring a seamless and stress-free setup for your business.

Even within our most basic incorporation package, you will receive a company chop and seal, along with the Articles of Association. Please feel free to contact us via the form below for further information.