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Dealing with Chinese Counterparts (4): Watch Out for Counterfeit Chinese Common Seals

Every company in China will receive a company common seal at the time of approval of incorporation, and the use of common seals in business practice is common and critical. A legitimate company stamp signals a company’s certification of certain documents on which the stamp is affixed, and documents without being stamped cannot be deemed as a company’s representation from the legal perspective.

Having in mind the importance of a common seal in China, it is quite concerned to us that many clients of ours approached us regarding contractual non-perfomance matters, in which the proforma invoices or contracts were stamped by our clients’ opposing party using anything other than a Chinese common seal. When you are trading with a Chinese (allegedly) company, this should be a ‘red flag’ indicating risks involved in your transaction.

Recognizing a Legitimate Chinese Common Seal

You could obtain much useful information of a company just by a glance of its common seal, such as its country of incorporation, or its authenticity. A legitimate common seal of a Chinese company shall have the following traits: (i) round, it diameter is around 4cm; (ii) only red; (iii) the Chinese name of the company within the seal. Here we have an example of what a legitimate Chinese common seals should look like:

In contrast, the rectangle, blue stamp with a signature stamp in the middle is usually common seal of a company which is incorporated and r