What is Company Chop and What Purpose Does It Serve
A company chop or a rubber stamp is an official stamp that is widely used in business practice particularly in Singapore. A company chop usually contains the name of the company, its registration number, and mailing address. It’s not a fixed format since companies can also customize their own company chop to better represent their brand.
Unlike company seal that is mostly used to seal contracts that is required by law such as contracts between two companies, company chop is an optional validation tool used by companies to endorse documents. In Singapore, a company chop is optional since it is not required by law.
But even though it is not compulsory to have a company chop, there are several benefits and purposes that a company chop Singapore can serve:
1. To Authorize Documents
In the western countries, individual signatures are much preferred than a company chop. High-level personnel such as president of a company have the power to authorize certain document with their signature. Once their signature is put on the document, the document has a legal basis and its contents can be put into effect immediately. A company chop has a similar power to western’s signature. A company chop should be in possession of trusted individuals that have the right to authorize documents on behalf of the company.
2. To Certify That the Documents Are Legitimate
Since a company chop generally contains important information about a company like its registration number, recipient of the documents can rely on it to certify that the documents are legitimate. A company chop has legal binding so companies usually make their own customized company chop that is hard to reproduce. It is done to prevent bad parties to create fake documents in the name of the company.
3. Increase Efficiency at Workplace
If there are a dozen of documents to authorize, it will cost the company too much time if high-level personnel use traditional handwritten signature to authorize the documents. Not only that, the personnel can feel tired easily that will certainly affect the uniformity of each signature. A company chop can be used to solve the issue. By using a company chop, companies can reduce the signing time quite significantly and uniformity of its signature is guaranteed. In the end, this small action can increase efficiency at workplace.
4. A Convenient Way to Fulfil Company’s Requirement Stated on Companies Act
In Singapore, under Companies Act, a company is required to have its name and registration number on multiple documents:
- All business letters
- Statements of account
- Official notices
- Bills of exchange
- Promissory notes
- Letters of credit
Since a company chop contains the name of the company and its registration number, a company chop can be used to fulfil the requirement mentioned above. Of course, if the company already has its name and registration number printed on the documents itself, a company chop is not necessity. Nevertheless, a company chop still has other benefits as stated before.