Upon establishing your own company in China, you'll receive several seals engraved with your company's name along with your business license. These seals vary in size, shape, and the specific text engraved on them, which might lead to confusion: What are these seals for? How should they be used in different situations? In this blog by Hongda, we will explore the functions of these various stamps and provide essential details you need to know when using them.
For most foreigners encountering it for the first time, the act of stamping a seal can seem strange. In the West, signatures are used as the identifying mark. Western documents and letters are signed with a person's name, using signatures to establish final responsibility or ownership. In interactions and collaborations between companies, it is the signer who often bears the responsibility, not the entire unit or department.
However, stamp culture in China has a long history. In ancient times, the Chinese government would grant seals during official appointments as the token of authority, which are referred to as official seals in later generations. Such seals were symbols of legal power, typically passed down with official positions and titles, and not owned personally. Nowadays, the ultimate responsibility for documents signed by the Chinese government or companies lies with the department, which must assume corresponding responsibilities even if the official who issued the document resigns or is transferred.
In today's Chinese business environment, the company seal represents the entire company and is crucial for internal management and external affairs. When a document is stamped with the company seal, it indicates the company's endorsement, giving the document legal force. Therefore, proper use of the seal is vital for a company’s survival, as misuse can lead to severe consequences. In this blog, Hongda will guide you on the essential seals and their correct usage in various situations.
1. The Company Official Seal
The company seal in China varies slightly in shape and size depending on the type of company. Limited liability companies typically have a round seal with a red mark, featuring a five-pointed star, the company's full Chinese registered name, and its unique 18-character social credit code (left). Joint ventures and wholly foreign-owned enterprises established earlier may have an oval seal, measuring 4.5cm by 3.0cm, without a star, possibly including the enterprise's logo, and can have both Chinese and English inscriptions (right).
When Should You Use the Company Official Seal?
The company official seal is the most authoritative seal, symbolizing organizational and legal rights of your company. It represents the corporate will, used for external contracts, legal documents, and various declarations. Unless legally specified otherwise, like for stamping invoices, the company seal can be applied to any document issued in the company’s name, including letters, official documents, contracts, and certifications. The most common uses of your company official seal include:
- Contract signing: Items stamped with the company's official seal are considered to represent the company's intent. For business with Chinese companies, contracts must be sealed to be legally valid and recognized, especially when both parties are Chinese companies.
- Handling external affairs, like business registration, taxation, and banking: These affairs require the company seal on all submitted documents to verify their authenticity and the company’s commitment, thereby confirming the company's engagement in these transactions.
2. The Contract-Specified Seal
As its name suggests, the contract-specific seal is used exclusively on contracts to grant them legal validity. In practice, however, most companies opt to use the company seal instead of the contract-specific seal on contracts.
3. The Company Finance Seal
The company finance seal is used on financial documents, such as bank transfer slips, receipts, payment vouchers, and financial statements, indicating that they have been approved by the legal representative or financial directors of the company. This seal ensures the regularity and legality of financial activities and is usually used alongside the corporate seal for banking purposes.
4. The Company Invoice-Specified Seal
The company invoice seal, crafted as per tax authority guidelines, bears the company's name, "invoice special seal" text, and tax registration number. It is used to be stamped on paper invoices, making it one of the most important stamps during business operation. However, with China's shift towards digital invoicing, paper invoice usage, and thus the need for this seal, has diminished, unless there is a specified need for paper invoicing.
5. The Company Invoice-Specified Seal
The company legal representative seal, engraved with the name of the company's legal representative, is often used on significant documents such as contracts, agreements, and important financial records. It also has applications in banking activities like issuing checks or cash withdrawals. This seal represents the personal identity of the corporate legal person and is used in major decisions and legal affairs to authenticate the content and the legal representative's approval. However, it is advised not to rely solely on this seal for contracts, as its authenticity cannot always be verified.
6. The Customs Registration Stamp
The Customs Registration Stamp is a specialized seal used by customs authorities, primarily to mark and verify that goods or documents have completed the necessary customs registration procedures. This stamp is an indispensable part of the import and export process, ensuring that all goods passing through customs comply with national regulations and are officially recorded.
How Should You Manage Company Seals?
1、Understand the importance of seal management
Due to the differences between Chinese and Western practices in using seals, you might find the use of seals in the Chinese business environment confusing at first. This is the very reason Hongda wrote this blog: to help you gain a deeper understanding of the significance of seals for your company. It also aims to inform you about when and what type of seal should be used to avoid potential financial losses.
2. Manage the seals with trusted individuals
The company seal is generally kept by the company's legal representative, general manager, or other individuals who can be held accountable for the company's actions, to prevent the seal from being misused by others, causing losses to you and your company.
3. Establish a seal usage registration form
You should establish and use a unified seal usage approval system and registration form, especially when your company has a large number of employees. Users must adhere to the company's seal usage regulations. Generally, only after the enterprise leadership clearly defines the purpose and agrees can the employees use the seal. The content and quantity of the seal usage should be audited under supervision before applying the seal to the relevant documents.
4. Do not use the seals on blank documents
During the use of the seal, you must ensure that users do not affix the company seal on blank documents, such as blank papers, blank forms, or blank letters of introduction. Otherwise, you will be unable to determine the content that will be filled in on the blank documents with the seal affixed, leading to significant risks later on.
5. Choose Hongda’s office assistance services if needed
Starting from scratch to establish and implement seal management might bring some troubles because you might overlook some details when first encountering seal usage. In this case, you can choose Hongda’s office secretarial services, where we will provide seal management services for you. Hongda will arrange secure storage for your seals and establish detailed usage records and provide implementation feedback and updates every time you need to use it, helping you manage your seal more appropriately. Additionally, if you have any concerns about the content of the documents to be stamped, you can also have Hongda assist you in reviewing and proofreading the documents to ensure their legality and avoid potential legal issues. You are welcome to visit our legal services page to learn more.
Hongda’s Company Stamp Management Service Introduction
Our Company Stamp Management Service is designed to protect and manage your company's critical documents and stamps. We commit to securely store all company stamps and related certificates, ensuring that these materials are not used or disclosed to third parties without authorization. We also provide monthly usage reports to ensure all actions are properly documented.
- Assigned personnel for safer and trackable management: You can appoint an authorized contact person responsible for the use of the company’s documents and stamps so that you can focus more on the operation of your business in China. At the same time, Hongda will assign a dedicated person to manage and safeguard the use of company documents and stamps for you.
- Authorized usage ONLY: All usage requests must be confirmed by our client’s designated contact person. After each use, Hongda will document the activity and file the related documents, providing detailed monthly usage reports. This allows you to track the usage of your company’s stamps and have peace of mind!
- Well-priced service fee: The monthly service charge starts from RMB 1200, depending on the tailored needs of your own company.
Hongda’s Company Stamp Management Service Introduction
If you accidentally lose the company seal, which carries significant legal authority, you should follow a strict procedure to address the issue, as only specific institutions registered with the public security authorities are qualified to engrave company seals. If you lose the company seal during your business operations, you should promptly contact the Hongda team. We will assist you in reporting the loss of the seal and submitting the application for engraving a new one, following these steps:
- Publish a declaration in the newspaper: with the loss report certificate and a copy of the business license, the company should then publish a declaration in a city-level or higher daily newspaper, declaring the lost company seal void.
- Record the new seal with the police: take the following documents to the public security bureau's security department to record the new seal: copy of the business license; copies of the legal representative's ID card or passport; a seal engraving certificate issued by the enterprise; a power of attorney from the legal representative; the copy of each shareholder’s ID card; shareholder roster; the published declaration in the newspaper.
- Engrave the new seal: After completing the registration for the new seal, you can go to a qualified seal engraving institution to have a new seal engraved under the guidance of the security department of the police bureau.
Conclusion - Ink and Power of Corporate Stamps
After learning about the specifics of company seal usage in China, it's clear that this is not just a matter of administrative procedure, but a crucial aspect deeply embedded in corporate management and legal responsibility. Each seal carries specific powers and responsibilities, making their proper use essential for protecting the company's legal rights and maintaining the normalcy of business operations. Companies need to establish strict seal management systems to ensure that each use complies with regulations, thereby avoiding potential legal and financial risks.
Through Hongda's blog, it is hoped that you have gained a deeper understanding of the classification and usage environment of company seals in China, and have learned how to avoid risks and losses caused by improper use of seals in Chinese business activities and company management. If you still have questions, or if you wish to introduce Hongda’s office secretarial or seal management services to your daily management, please feel free to contact us so we can provide you with the most suitable customized services.
