Introduction to Chops in China
By Leo Liu & Tate Zhao
“IN WITNESS WHEREOF, this Agreement has been signed by the duly authorized representatives of the Parties on the day first written above.”
When you see this clause in an agreement between two companies, what is the next step if you would like to execute the agreement? It is only natural if the individual duly authorized by the company pulls out a pen and puts down his/her signature where it says “Signature.” But if the counterparty to the agreement is a Chinese company, a “company chop” is typically required and helpful in the unfortunate event of dispute. This article briefly introduces the company chops in China and the legal requirements therefor.
A. Chops of Business Entities
1. What are the chops and what they look like
In practice, a company typically has five chops –
1) Official Company Chop. It is the most widely used chop of a company and can be applied on all sorts of company documents and contracts (except for official invoice). Pursuant to the Rules on the Administration of Chops for State Administrations, Companies, Public Institutions, and Non-governmental organizations, the company chop shall be in round shape and not exceed 4.5cm in diameter. A pentagram is placed in the center with the company name (reading from left to right) around it:
Figure 1 Sample of Official Company Chop 1
For Chinese companies with foreign investments, they can have bilingual company chops – stating both the English and Chinese names of the company:
Figure 2 Sample of Official Company Chop 2
Please note that given certain historical reasons, official company chop can vary in shape if the companies were founded earlier. For example, some official chops may be oval or without a pentagram.
2) Contract Chop. It is for contracts only and when applied, it represents the full authority from the company. It is of similar dimensions as the official company chop but with a line of “Special Contract Chop (and serial number)” at the bottom:
Figure 3 Sample of Contract Chop
3) Invoice (Fapiao) Chop. This chop is for official invoice (Fapiao) only. It shall be in oval shape, with long axis of 40mm, short axis of 30mm, and border width of 1mm. The characters of the Special Invoice Chop (“发票专用章” in Chinese) are 4.6mm high and 3mm wide, while the taxpayer’s name is 4.2mm high and its width is determined by the number of characters in the name. The taxpayer identification number is in Arial with a character height of 3.7 mm and a width of 1.3 mm.
Figure 4 Sample of Invoice Chop
4) Accounting Chop. They are typically used on financial documents, such as bills, checks, bank drafts, and etc. They can be round or rectangular:
Figure 5 Samples of Accounting Chop
5) Legal Representative Chop. It is often used in lieu of the signature of the legal representative of the company. Typically, it is in rectangular shape:
Figure 6 Sample of Legal Representative Chop
2. Legal requirements for company chops
Except for the Legal Representative Chop, the other four chops must be filed with the Public Security Bureau for record. In addition, the chops must be made by an authorized maker.
Though the chops are required by law to be filed for record, the counterparty is not burdened with the obligation to verify whether the chop used by the company has actually been filed or not. The fact that the chop applied to a contract carries the name of the company is prima facie evidence that the company is a party to that binding contract.
b. Intended scope.
As mentioned above, each of the five chops, except for the official company chop and the legal representative chop, has their intended purpose and scope – the contract chop is to be applied to a contract only. What if a chop is used beyond its intended scope?
If a contract was stamped with, for example, an accounting chop, the contract will still be effective if the individual applying such a chop has formal and legal authority to do so, if the company subsequently ratifies the contract, or if it can be shown that the agent’s use of the special chop is in accordance with trade practice. For the avoidance of doubt, it is recommended that you ask the counterparty to apply the official company chop or the contract chop.
B. Chops of Public Institutions and Organizations
If you also have dealings with the state organs, according to the Chinese law, the names on the chops of state administrative bodies, enterprises, institutions, and social organizations must be their legal names. Where the name is too long, a standardized abbreviation may be used. The chop shall be printed in Chinese characters, using the simplified characters published by the State Council, and in the Song script. The chops of autonomous regions may bear both Mandarin and the local characters. Here are some examples:
1. The chop of the State Council shall be 6cm in diameter, with the State emblem in the center and the name outside the emblem in a circular line from left to right.
Figure 7 State Department
2. The chops of the Government of each province, autonomous region, municipality directly under the Central Government, the General Office of the State Council, and the ministries and commissions of the State Council, shall be 5cm in diameter, with the State emblem in the center and the name outside the emblem in a circular line from left to right.
Figure 8 Hebei Provincial Government
3. The chops of agencies and offices directly under the State Council are 5cm in diameter for units at the main ministerial level and 4.5cm in diameter for units at the vice-ministerial level, with the State emblem in the center and the name outside the emblem in a circular line from left to right.
Figure 9 State Administration for Market Regulation
4. The chops of units directly under the State Council shall be 5cm in diameter for units at the ministerial level and 4.5cm in diameter for units at the vice-ministerial level, with the State emblem in the center of the chop for units with administrative functions, and a pentagram in the center of the chop for units without administrative functions, with the name outside the State emblem or the pentagram in a circular line from left to right.
Figure 10 China Securities Regulatory Commission
Figure 11 China National Radio
5. The chops of the State Bureau administered by the Ministry of State, shall be 4.5cm in diameter, with the State emblem in the center and the name of the organ outside the emblem in a circular line from left to right.
Figure 12 National Medical Products Administration
6. The chops of the Government of autonomous prefectures, cities, counties (counties, autonomous counties, county-level cities, banners, autonomous banners, special zones, forest districts, hereinafter referred to as the same) and municipal districts, shall be 4.5cm in diameter, with the State emblem in the center and the name of the organ outside the emblem in a circular line from left to right.
Figure 13 Shanghai Fengxian District Government
7. The chop of public institutions. and social groups shall be no larger than 4.5cm in diameter, with a pentagram in the center and the name outside the pentagram in a circular line from left to right.
Figure 14 Beijing Normal University
8. The chops of the Government of the township shall be 4.2cm in diameter, with a pentagram in the center and the name outside the pentagram in a circular line from left to right.
9. The chop of the organ of administration shall be no larger than 4.5cm in diameter, with a pentagram in the center and the name outside the pentagram in a circular row from left to right.