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The company chop: what actually binds a Chinese company

A signature is not what makes a Chinese contract binding. The red seal is — and there is more than one of them.

France → China

European contracts are bound by signature; the person signing represents the company and their authority is the question. Chinese practice is built around the company chop: a physical seal, registered with the authorities, whose impression on a document binds the entity. A contract with a proper chop and no individual signature is generally stronger than one with a signature and no chop — which is the opposite of the reflex most foreign counterparts arrive with.

Not one seal but several

  • The company chop, round and red, is the general-purpose one and the one that matters for a commercial contract.
  • The legal representative's chop belongs to the named individual who represents the company in the register.
  • The contract chop, the finance chop and the invoice chop each have a restricted purpose, and a finance chop on a supply contract is a question worth asking.

What to check before you rely on one

  1. That the Chinese characters on the chop match the registered Chinese name of the company exactly — not a trading name, not an English name.
  2. That the entity chopping the contract is the entity that will invoice you and receive your payment. A different name on the bank details is a serious question, not an administrative detail.
  3. That you hold an original or a clear scan of every page that is chopped, and that multi-page contracts are chopped across the pages where that is the practice.
  4. That the business licence you were given names the same entity, with a scope of business that covers what you are buying.

Why this matters more than it seems

Almost every dispute where a foreign company discovers it has no recourse traces back to the same place: the document binds an entity that is not the one holding the assets, or binds nobody at all. The verification takes an afternoon and is the single highest-value piece of due diligence in a China contract.

This is general context and not legal advice. Have a lawyer qualified in Chinese law verify the entity, the chop and the signing authority before a significant commitment.

Questions we get on this.

Is a contract with a signature but no chop valid in China?

It can be, depending on the signer's authority, but it is a much weaker position than a properly chopped contract and it is the first thing a counterparty will contest. The practical rule is to obtain the chop of the correct registered entity and to have the entity verified, rather than to rely on the argument afterwards.

Keep reading on this.

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If this raised a question about your own project, tell us where you are — the first conversation usually clarifies more than a proposal.

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