Common Seal vs Company Chop in Hong Kong

We’ve come a long way from times when a signature is all that is needed to legalize documents, but some still retain the traditional way of rendering valid documents – such as the case of Hong Kong. Company chop or company seal, which one do you need to validate your company’s legal documents? Let’s find out through this article.

What is a common seal?

A common seal is a type of corporate stamp used by companies in Hong Kong. It is a small, circular device that has the company’s name and registered office engraved on it. The common seal is usually used to authenticate documents such as contracts, letters, and minutes of meetings. 

What is a company chop?

A company chop is a corporate stamp used by companies in Hong Kong. It is a small, rectangular device that has the company’s name and registered office engraved on it. The company chop is usually used to authenticate documents such as contracts, letters, and minutes of meetings. Another purpose is to act as evidence of the authenticity of the company’s name and registered office. Lastly, it can be used as a deterrent against fraud.   

Does my company need a company chop or common seal in Hong Kong?

Most companies in Hong Kong do not require a common seal or company chop. However, there are some exceptions. For example, companies that are limited by a guarantee or have a share capital of less than HK$100,000  must have a common seal. Companies that are authorized to issue debentures must also have a common seal. 

In Hong Kong, companies are not required to have a common seal, this was made effective in the new Hong Kong Companies Ordinance 2014. The common seal is an impressed wax seal used by companies in common law jurisdictions to authenticate documents that are signed on behalf of the company and can also be used to execute contracts.

On the other hand, the company chop is an official stamp used by companies in Hong Kong and is registered with the Companies Registry. Only directors or authorized signatories of the company. The company chop is usually used to stamp documents such as invoices, letters, and meeting minutes. It is important to note that the common seal and company chop can be used together to authenticate documents.

Some companies in Hong Kong choose not to use a common seal or company chop and instead use their signature as an authentication method. This is generally fine as long as the directors or authorized signatories are aware of their responsibilities when signing documents on behalf of the company. 

Generally, if you are not sure whether or not your company needs a common seal or chop, it is best to consult with an accountant or lawyer.

How do I get a company chop or a common seal?

There are a few prerequisites you must meet in order to get a common seal or company chop:

Your company must have at least one director and one shareholder for a common seal. The company’s name must also be registered with the Companies Registry.  If it’s a company chop you want, then your company must have at least two directors. Make sure to have all the required documents and information ready before you start the application process. It can take a few weeks to get your common seal or company chop, so plan ahead. 

Next is to go through your company’s registered office and ask for the necessary forms and instructions on what to do next. To get a common seal or company chop, you will need to go through your company’s registered office. They will be able to provide you with the necessary forms and instructions. 

Conclusion

In conclusion,  a common seal and a company chop are both optional for Hong Kong companies. A common seal is used to physically bind documents, while a company chop is used to authorize signatures. But we recommend getting them nonetheless especially if you plan to expand to China as they are known to require a chop when doing business. Another thing to keep in mind is to not hand your chop to everyone as they may not have the same level of knowledge in business operations as you. Need more information about the creation of a company chop or common seal? Don’t hesitate to contact our friend consultants on the matter.