In Western countries, company chops, also known as a company seal or  company stamp, are needed for doing business and have replaced signatures. A corporate seal serves as a physical representation of a company's foreign operations and legal evidence.

The seal's temporary custodian is the person-in-charge of the company or other management personnel entitled to hold the chop, also known as the seal. Consequently, the company should assume the rights and obligations that exist rather than the holder or custodian. 

Foreign-invested enterprises (FIEs) must deliver the business chop after registering with the Administration for Market Regulations (AMR). The company's full registered name must be included in the business chop, filed with the Public Security Bureau (PSB). 

Depending on the size of a company's activities, it can require many chops, each for a specific purpose and to be used on various documents. 

As mentioned below, there are five basic types of company chops, also known as seals and stamps, and a few others that can be used in particular situations. 

1. Official Company Chop 

When any vital contract is signed, an official company chop is required. It can provide legal authority when opening a bank account or changing a company's name or business scope. 

Of all the seals, the official company chop has the broadest range of applications and serves as a sign of legal persons' rights. 

The official chop can be used on all emails, official papers, contracts, introduction letters given in the company's name, and certificates, and other company materials. Certain documents will, however, be expected to be stamped with a specific chop under certain circumstances. Invoices that must be stamped, for example. 

2. Financial Chop 

The financial chop is used to open a bank account, write checks, authenticate financial documents like tax filings and compliance documents, and carry out most bank transactions. 

It is a necessary chop, though the company chop may frequently be substituted. This is why, to avoid being harmed, businesses often keep their financial and business operations apart. 

The PSB and the company's bank must both be notified of the chop. 

3. Legal Representatives Personal Chop 

The personal chop of the legal representative is a chop held by the legal representative of the business. The legal representative is the company's main principle, as defined on the business license, and has the right to enter into legally binding agreements on the company's behalf. There can only be one legal representative per organization. 

The legal representative's personal chop moay be used instead of or in addition to a signature. It must be registered with the PSB and the company's bank after registration. 

4. Contract Chop 

Many businesses keep a separate contract chop to negotiate contracts with their workers or carry out deals between salespeople and clients. 

The contract chop gives you less authority than the business chop, so it's suitable for delegation. 

5. Electronic Chop 

An electronic chop is a digital representation of a particular chop used for online transactions, such as financial and contractual ones. 

Electronic signatures, including electronic chops, have had the same legal standing as physical seals since the release of the PRC's Electronic Signature Law, which was last amended in 2019. 

However, to be considered a "reliable" electronic signature of legal weight, it must meet the following criteria: 

At the time of signing, the electronic chop formation data must be solely owned and managed by the signatory. 

Any subsequent changes to the electronic chop and any related data must be detectable, and Signato must be able to do so. 

Other Types of Chops 

Customs Chop 

Customs declarations on import and export products are made with the customs chop. It is required for companies that conduct cross-border business. 

Invoice (fapiao) Chop 

Issuing official invoices and tax refunds necessitates the invoice chop (fapiao). To report a transaction as a business cost, you'll need a chopped invoice. 

However, to meet the criteria, a business chop can be obtained, which must be countersigned by a recognized member of the parent company's board of directors. In most cases, Chinese authorities will specify who should sign and seal the document. 

Within their domestic legal system, in-house counsel for US or EU companies can decide the legal use of chops and seals. The Chinese enforce their own domestic administration rules on foreign companies by demanding seals and chopped documents without appreciating that foreign investors are not regulated by the same regulatory system in their home country.