What are the benefits of company chop stamp in Hong Kong?
As a business owner, you typically send written communications to your customers, associates, and suppliers. This is where you will need a company chop, which helps to establish and reinforce your brand.
In this post, we will cover all you need to know about a business chop, what is it, and how you can get one for your Hong Kong company.
Table of Contents
What is a company chop?
Company chops are simply a business’ rubber stamp that represents its signature.
It has colonial Indian English origins and is vastly recognized as the company’s representation of authority in signing documents.
A company’s corporate chop is generally rectangular or circular, inked in either blue or red., and imprinted with the company name and registration number.
Note that while a Hong Kong company is not required to have company chops, you may need to get one if you regularly exchange official documents with companies in Mainland China.
In China, the government issues chops as a requirement to operate a business. We cannot understate the significance of a company chop for anyone doing business in Mainland China.
Businesses in Mainland China go into great pains to ensure the security of their company chops.
Purpose of a company chops
Company chops or stamps are used by businesses to authenticate documents. It helps in facilitating business, as you can use it in place of your own signature.
If you are a business owner in Hong Kong, you can sign a contract on your company’s behalf by stamping the chop where the signature is requested.
Where can I get my company’s rubber stamp?
Fortunately, getting a business chop in Hong Kong is not complicated.
You can opt for the services of companies that can create your unique business chops. You can select a design and give important details, such as your company name, registration number, and other important representations. Normally, you can get your rubber stamp within just a few days.
There are no official issues of stamps and chops in HK, which means you can design your company chop based on your preferences.
You might design your own stamp and send your company details to a rubber stamp producer who makes chops by order.
Validity of documents without a company stamp
Section 124 of the Common Ordinance states that a business may use a common seal.
This will give the company increased flexibility in doing business, while not prejudicing those that want to use a common seal instead of a signature.
A Hong Kong company may use chops or stamps to conduct business as it could certify papers and establish their validity. Note that back in the day, a company’s commitment to a contract was shown through a stamp on the document.
However, papers signed only by directors may be interpreted by the courts as an act or action performed by the individual on behalf of the corporation.
This is the reason why corporate chop is no longer mandatory for a Hong Kong company.
So, a document without a stamp is just as legitimate as document with one.
How to secure your company chops from possible misuse
In a recent case in HK, TS Office System Ltd v Wing Kee Products Ltd the Hong Kong Court looked into whether the company stamp affixed by the receptionist is legally binding.
The time, effort, and resources spent in appealing to this case serve as a reminder for company owners to use their company seals with prudence.
As an owner of a Hong Kong company, you would like to avoid possible litigation such as the Hong Kong company chop case above.
You would like to observe security measures to protect your business, including your company name.
Note that a company seal or chop is linked to the company, and anyone who has access to it has the ability to bind the firm with just a single stamp in official company documents.
That is, your Hong Kong company can be held accountable for papers stamped through your company seal, regardless of the insufficiency of the power of the stamp holder.
Here are some tips on how to best secure your company stamp:
- Limit access to the stamp or company seal and entrust it only with trusted members of your company
- Have a record for each chop used
- Add another layer of security, such as a legal representative to sign alongside the company stamp
- Conduct audit of company legal documents for easy identification of instances where the company stamp was misused
It also helps to limit the availability of your company’s rubber stamp.
Main types of company chop
Another layer of security to prevent possible misuse of your Hong Kong company chop is to limit its availability.
You may want to have only one company chop, such as your official Hong Kong company chop. To put it simply, have an official chop or custom company seal, and forget about a contract chop if you don’t need it.
Read on to know more about the different types of company chops, and to determine which you should keep for your business in Hong Kong.
Official company chop
This is your primary company chop, typically used as an official stamp for your contracts, letters, and other documents.
Documents issued with official corporate chop is legally binding in Hong Kong, as it represents the highest degree of legal authority of the company’s board.
Financial chop
A financial chop can be used to allow a firm to establish and maintain a bank account.
Contract chop
While a contract chop is not compulsory, business owners use it to execute documents and binding agreements with third parties.
Invoice chop
The invoice chop is one of the common chops as it is used primarily to stamp invoices and receipts. st.
Am I required to have a company chop?
Company chops and common seals were once used in certifying and authenticating company documents.
However, the use of a company chop has become optional with the new Hong Kong Companies Ordinance 2014.
This means, as a business owner in Hong Kong, you are not required to use a company chop.
In place of company stamps, businesses can now be bound by the signature, even by only one director.
Still, company chops are still widely used by both established and new companies in Hong Kong.
For instance, a company’s chop is preferred when documents are signed by a business employee, such as your company secretary who signs in place of two or more directors.
What is a Hong Kong company common seal?
The adoption of the New Companies Ordinance in March 2014 eliminated the requirement for a Hong Kong company common seal.
A new company is free to get a Hong Kong business seal. The Companies Ordinance, however, requires that your corporate seal is metallic, with your company name legibly carved.
How can ReachTop KSHK help to Register your company chop?
A company chop is not mandatory, but it remains important for Hong Kong companies to maintain a common seal.
Are you looking to establish the credibility and legitimacy of your business through a common seal?
Feel free to contact us today to set up a consultation with our team of experts.
