There are various smaller and bigger aspects of working with a Chinese company which a foreign organization must look into before or even after deciding to work with the counterpart in China. Apart from the provisions incorporated inside the contracts, it is wise to check the seal that the company places on the contract. A seal makes a document legally valid and checking whether the seal is original or not is of immense importance for the company. In fact, many foreign companies have faced trouble with the authenticity of the seal provided by a Chinese company. In such a circumstance, a Chinese business lawyer receives request to verify the seal of the company.
However, ascertaining the authenticity seal of a Chinese manufacturing company is virtually impossible to find. But you can still try to find out by visiting the company in person and examining their earlier contracts. In fact, comparing the document that you have now with the one that was present earlier will provide a fair idea about the authenticity of the seal. However, this is not a sound method to know whether the seal is real. There is a better way to find it. You can send a lawyer from a Chinese law firm to the company and also to government office to cross-examine the seal whether it is real or not. However, if you are not capable of following these 2 methods, you can go for another one which consists of the following:
- The title of the signatory in Chinese and English
- Its name in Chinese characters
- A scanned copy of their business card both in English and in Chinese
- Ask for an explanation preferably in written form inquiring the reason behind the non-standardized appearance of the seal. Also, inquire about the absence of the company’s registration number.
However, this is not the end. There are other things to be kept in mind while trying to probe into the authenticity of the seal belonging to the Chinese manufacturing company. The first thing is to know what constitutes a real seal in Chinese context. A business agreement with a Chinese company must be executed by a person holding the authority to use the seal and the contract must be sealed by an official company. However, there is a confusion regarding which is a real seal in this context as there are different types of chops/seals.
Most of the times, it is impossible to know just by looking at a seal whether it is real or not. There are many reasons behind it. First and foremost is that different cities have different rules and regulations regarding seal/chop, hence, knowing its validity is impossible. It may not have been legally registered according to a particular city. The Chinese courts generally do not interfere in this as long as the seal belongs to the company and it has been done by someone authorized to carry on the duty. It is generally a legal rep who deals with the seal/chop. To avoid any kind of confusion regarding chops, insist on the standard company chop denoted by round shape in red ink. Some of the seals are numbered whereas others are not and hence it is best to go for the red inked one. This to the popular belief is not an indicator of validation; instead, it varies from district wise.
The oval chops in black and purple shades are uncommon and should be avoided for companies that desire to take the careful approach. However, some districts are using the oval seals for unknown reasons. If you are working with a company from these districts, then you have to accept this seal only. Having said that, we should also remember that any Chinese company has access to the standard round chop which has a star in the center. This works for all.
Therefore, the bottom line is that you do not have to over think this matter. As long as a standard chop is used for the contract signed by an apparent authority, it is valid. Since, there is the presence of different kinds of seals depending on varied districts, putting too much time and effort on this matter is futile. However, using a chop or seal on a contract is required for the document to be deemed valid in China. Thus, it must be sealed.