If you are used to signing contracts with a pen, China’s chop system will be one of the first surprises of doing business there. In China, a company’s legal identity is expressed through a set of physical seals — called chops or company seals — rather than through a director’s signature. These stamps carry real legal authority: a document bearing the official chop is generally binding on the company, whether or not a named individual also signed it. This guide explains what the main chops are, what each one is used for, who should hold them, and how to manage them securely. For a newly incorporated foreign-owned company, getting the chops made and allocated correctly is a critical first step after your business license is issued.
- A company chop is a physical seal that carries binding legal authority for a China company, replacing individual signatures.
- Most companies hold four chops: official, financial, legal representative, and fapiao (invoice).
- The official chop can bind the company on its own, so it must be tightly controlled and logged.
- The legal representative chop is personal to the appointed legal representative and is used for tax and bank matters.
- Chops must be carved by a licensed maker, registered, and stored securely; a lost chop must be reported and replaced immediately.
Table of Contents
What Is a Company Chop and Why Does China Use Them?
A company chop (gongzhang) is a physical stamp engraved with the company’s registered Chinese name and a unique code. Under Chinese law, affixing the official chop to a document expresses the company’s intent in a way that a personal signature alone does not. The system predates modern company law and remains deeply embedded in how banks, tax authorities, courts, and counterparties verify corporate authority. In practice, this means you must treat your chops as carefully as you would treat a blank signed checkbook: whoever controls the official chop can, in many cases, commit the company.
The Four Main Company Chops
Most companies in China, including wholly foreign-owned enterprises (WFOEs), hold four core chops. Each serves a distinct purpose and carries a different level of authority.
| Chop Type | Primary Use | Typical Custodian | Key Risk |
|---|---|---|---|
| Official (Company) Chop | Contracts, government filings, official documents | General manager or authorized officer | Can bind the company on its own |
| Financial Chop | Bank transactions and financial documents | Finance manager | Enables movement of funds |
| Legal Representative Chop | Tax filings and matters in the representative’s name | Legal representative personally | Represents personal legal authority |
| Fapiao (Invoice) Chop | Stamping official tax invoices | Finance or accounting team | Tax compliance exposure |
How Chops Are Made and Registered
After your company registration is approved and the business license is issued, you arrange for the chops to be carved by a licensed chop-making shop, which records the engraving with the local public security bureau. Each chop is engraved with a unique code that links it to the company. You then register the chops with the bank when opening your corporate accounts, so the bank’s records match the impressions on file. Because the process is tied to the license and registration records, it is one of the first post-incorporation tasks our secretarial services team handles for new clients.
The Legal Representative Chop and Legal Authority
The legal representative is the individual named on the business license who acts on the company’s behalf, and their personal chop is distinct from the company’s official chop. It is typically used for tax registration and filings, and in some bank and government matters. Because it is tied to a named individual, the legal representative chop should be kept separate from the official chop and handled with clear authorization. The precise allocation of authority is usually set out in the articles of association and board resolutions, which is why it is worth reviewing them carefully with your company incorporation advisor at the outset.
Chop Security and Internal Controls
Because a chop can bind the company without a signature, internal controls matter more in China than in jurisdictions that rely on signatories. Sensible practices include:
- Store chops in a locked safe or cabinet with restricted access.
- Keep a written log of every time a chop is used, by whom, and for which document.
- Separate custody: the official chop and the financial chop should not be held by the same person.
- Require dual approval for high-value contracts and bank transactions.
- Report any loss immediately to the police and to the relevant banks, then arrange a replacement through a licensed maker.
A lost official chop is a serious event because a third party could use it to sign contracts in the company’s name. If you are unsure whether your controls are adequate, our legal services team can review your internal authorization rules.
Chops in Daily Operations: Banking, Tax, and Contracts
You will use your chops constantly once the company is running. The financial chop is required on bank forms, while the official chop appears on contracts, lease agreements, and government submissions. Tax invoices are stamped with the fapiao chop, and the legal representative chop is used in tax bureau dealings. When you open a corporate bank account in China, the bank will record specimen impressions of the official and financial chops and compare them on every transaction. A clear, documented chop-management routine — set up at incorporation — prevents most of the disputes and compliance headaches foreign companies encounter later. For a broader look at what happens right after the license is issued, see our guide to how to set up a company in China.
Frequently Asked Questions
Disclaimer: This article is for general informational purposes only and does not constitute legal or corporate-governance advice. Chop requirements and practices vary by company type, city, and your specific circumstances and may change. Consult a qualified professional before relying on this information. Dan Young Business Consultancy provides secretarial and related corporate services but makes no guarantees about individual outcomes.
