Chinese company due diligence Seal or Chop

Was cc’ed on an email between one of our China lawyers and a client that sets out what our client can do to help ensure that the company chop on its China contract corresponds with the actual company chop (a/k/a company stamp or company seal) held by the Chinese company with whom our client is conducting its China business.

Thinking the email might be helpful to our readers, I have reproduced a sanitized version of it below.

I start by noting that because we have already conducted due diligence on this company, your odds of having a future problem with its company chop have gone down. The fact that it is in the medical device business (and is not a rubber ducky manufacturer) also reduces the odds of you having a company stamp problem.

But, the truth is that the only way to be virtually certain about a Chinese company chop is to do a great deal of in-person due diligence. For example, you could visit the factory in person, inspect the company chop there and then compare it to previous contracts executed by the company and provided to you. Or, better yet, you can send a Chinese attorney to confirm with the government that the company chop that will be used on your contract is actually the company’s real company chop.  But since the dollar value of this particular transaction probably does not warrant your doing these things, we suggest you ask the Chinese party to provide you with the following:

1. Mr. Zhou’s title, in Chinese and English;

2. Mr. Zhou’s name in Chinese characters;

3. A scanned copy of Mr. Zhou’s business card, in Chinese and English;

4. A copy of the company’s business license.

5. An explanation as to why the company seal/company chop/company stamp on this document appears nonstandard (i.e., oval instead of circular) and does not have the company’s registration number.

Got that?

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.