The company chop is king in China. It basically means that in China a company seal on a document has the same value as a handwritten signature acknowledging the contents of a contract in the West & turning it into a legal paper.
One of our customers faced an UFO (Unidentified Financial Obligation) because of sloppy handling of the company’s stamp. One of their employees, when (s)he got hold of the precious company seal ,turned a bit enterpreneurial & dutifully chopped a couple of blanco A4 sheets with the cherry red company stamp…… with the idea “To be used at a later date”. That “later date” turned out a couple of months later when (s)he got fired.
Shortly afterwards when the company owner thought everything was settled, a lawyer defending the employee turned up at the company’s doorsteps with a document that in short stated: “In case Mr/Ms xxxx is fired the company will be obliged to pay her/him a compensation equivalent to 2 years salary” The document back dated and duly signed by the employee next to the company’s red seal……….
Since this company hadn’t specified anything in the company’s by-laws how legal documents should be signed off & by whom, the owners had no other recourse but to haggle a bit and ultimately pay up.
Many other variants of UFO’s turn up on companies’ desks & those alien to the significance of the company seal expose themselves unnecessarely to the legal concenquences this could have for the shareholders. Sadly enough those UFO’s can sometimes turn out to be a real & eminent threat to the going concern of the company.
