Key Takeaways
Both a company chop (stamp) and a company seal are formal symbols used to lend legal authenticity and credibility to a document.
Company chops are made of rubber and are used with ink to print the company symbol and information, such as the full name of the company.
Company seals are made of metal and are pressed onto wax. It contains virtually the same information as a company chop.
Since 2014, a Common Seal is no longer required, but you may still use it.
The open economy of Hong Kong and its business-friendly environment make this jurisdiction a favourite choice to open companies. A Hong Kong Private Limited Company is quite a popular vehicle for doing business in the Asia Pacific region due to their low requirements for registering in Hong Kong, as well as the short time to complete the process.
Something that is often overlooked after the incorporation process has been completed, is the set of official documents of your company, which are issued by the local authorities, such as the Hong Kong Companies Registry or the Inland Revenue Department. Additionally, unlike the common practices of Western countries, in Asia, signatures don't have the same legal or official weight as the chops or seals.
With Hong Kong being the bridge between the east and the west, a combination of both is used. However, the company chop has significant legal weight.
In this article, we will be focusing on the use of a company chop or a company seal, as well as other considerations like where to keep it and how to replace them.
What Is a Company Chop?
From the archaic word for “trademark,” a chop refers specifically to a legally binding stamp in Hong Kong. It is made of rubber and is used (with ink) to print information about a company. For example, its full name. It’s used in some countries, especially those that have a legal system based on the Common Law, such as the United Kingdom, New Zealand, Australia, and Hong Kong. It gives binding legal status to documents related to the company and its business activities. In other words, it serves as proof that a document has an official nature and was approved by a business entity.
Your company will have two types of chops. There’s the rectangular and the circular chop. The company name and a space to include a signature will be printed by the rectangular chop. It’ll mention the words “for and on behalf of” and “authorised signature.” The circular chop only has the company name. It’s also less frequently used.
What Is a Common Seal and What Is It Used For?
A common seal has a very similar purpose to the company chop. A common seal is normally attached to a document with wax, and then it’s pressed with the information of the company, such as its address and the full company name. Under the Hong Kong Companies Ordinance of 2014, the use of company seals is no longer needed. If a company chooses to use it, it can still be used as the owners of the company see fit.
Company Chop vs Common Seal
To answer the question, "What is a company seal vs. company chop?" is quite simple—they're virtually the same legally, but they are different physically.
Physically, the company chop is typically made of durable rubber and is used with ink to imprint the company's name and other relevant information onto documents. The common seal (also called a corporate seal or company seal) is a metal device that embosses or debosses the company's information into a document, traditionally paper or wax.
Legally, both the chop and the seal carry the same weight, serving as proof that a document is officially sanctioned by the company. However, the context in which they are used can vary. The company chop is often sufficient for day-to-day operations such as approving invoices, contracts, or other routine documents.
Did you know? While there is no legal difference between a company chop and a common seal, the common seal was considered essential when a higher level of formality was needed, and it still holds some of that cultural weight today.
Hong Kong and Mainland China - Do They Have Different Chops?
If you compare a (company) chop from Mainland China and one from Hong Kong, you can find differences. It’s important to note that in Mainland China, a company chop has a lot of legal weight. It’ll be needed for generating invoices (fapiaos, or in Chinese: 发票) to approve bank transactions. It’s also registered with the government and has its serial number. A chop from Hong Kong isn’t used in the same way. It will help prove that a business in Hong Kong is official.
A chop from a Hong Kong company can’t be used in Mainland China. They’re not interchangeable. They belong to different jurisdictions and legal systems! When signing a commercial contract, you should check which system it comes from. It’s easy to confuse the jurisdiction of Hong Kong with that of mainland China.
Where Should You Keep Your Company Chop?
After the incorporation process of your Hong Kong company has been completed, a set of chops is normally given to the owners of the company. These chops are carved by a commercial company. Moreover, the chops don't need to be registered with the local government authorities of Hong Kong. Furthermore, they’re made of rubber, and they contain some details of your company, such as the full name of your company. You can also customize your company chop as much as you want.
Although currently in Hong Kong, the chops are not as used as before, they still hold important information about your company, and therefore, they must be kept in a safe place. Usually, as most of the business owners of Hong Kong companies are located overseas and run the business from their home country, they choose to delegate the chop-keeping task to their service providers in Hong Kong. For example, to their Company Secretary, their accountants, or their legal advisors. A fee is commonly charged or even included in a package when using some of their services, especially if they also act as the registered address for their clients.
Keeping your chops at the same address where your company is registered is more convenient! Also, your service provider can have them ready if they’re needed. Otherwise, the chops would need to be sent overseas, and the courier fees could sum up.
How To Replace Your Company Chop
There could be a few situations in which the company chops could be lost, such as by misplacing them or even when changing your service providers. Another scenario is that the chops could become damaged, worn out, or even meltdown. It could happen! But luckily, if you need to get a company chop in Hong Kong replaced, it’s easy to do. You can get a company chop ready in as little as 1 or 2 working days, and the price for carving out the chops is quite cheap. Also, there is even the possibility of asking for 2 sets of chops when registering your company, so you can keep one with you and one in Hong Kong.
Conclusion
As we’ve seen in this article, the company chop and, to a lesser extent, the common seal is being used less and less for common practices in Hong Kong companies’ affairs. As the new regulation of the Companies Ordinance took effect in 2014, there is still a practice of having the company chop as part of the formalities. However, they aren’t required to participate in most official processes in Hong Kong. Nevertheless, it’s important to keep the chops in a safe place. Only give them to someone you can trust!
FAQs
What is the difference between a company chop and a common seal?
Both a company chop and a company seal are formal symbols used to lend authenticity and credibility to a document. However, they differ in their construction; a chop is made of rubber, while a seal is a metal plaque. A chop leaves a print with ink, whereas a seal needs to be pressed into paper or wax. Notably, company seals are no longer commonly used.
Is a document with a Mainland China company chop valid in Hong Kong?
Are there any legal differences between a company chop and a company seal?
