Many Hong Kong businesses use a company chop, a rubber stamp bearing the company name, alongside signatures. Under the Companies Ordinance, however, a company is not required to have a common seal, and a chop is not a legal requirement for signing contracts. What matters legally is that documents are executed in a way the Ordinance recognises, by people with authority.
A document is validly executed by the company if signed by two directors, or a director and the company secretary, or, for a company with a single director, that director, and expressed to be executed by the company. Banks and counterparties often still ask for a company chop as part of their own procedures.
At a glance
- Common seal
- Optional; if used, it must show the company name in legible characters
- Company chop
- Not a legal requirement; widely used in practice
- Valid execution
- Two directors, a director and the secretary, or the sole director
- Electronic signatures
- Generally recognised, with exceptions
Ways a company can execute documents
| Method | In practice |
|---|---|
| Common seal (optional) | Affixed and signed in accordance with the articles |
| Two authorised signatories | Two directors, or a director and the company secretary |
| Single director | Where the company has only one director, that director signs |
| Authorised agent | A person given authority by the board, for example under a board resolution or power of attorney |
| Deeds | Executed as above and expressed to be executed as a deed |
Company chops in practice
- Round chop or name chop: the company name, often in English and Chinese, used with signatures on contracts, invoices and bank documents.
- Signature chop: some banks accept a chop together with authorised signatures under the bank mandate.
- A chop does not by itself prove authority. Counterparties are entitled to ask who signed and whether they were authorised.
Controlling signing authority
- Set out signing authorities in a board resolution: who can sign what, and up to what value.
- Align the bank mandate with that resolution.
- Keep the chop and seal securely, with a usage log.
- Review authorities when directors or staff change.
- Retain signed originals or secure electronic copies of key contracts.
Electronic signatures
Hong Kong's Electronic Transactions Ordinance generally recognises electronic signatures for most commercial documents, with exceptions for certain documents such as wills, powers of attorney and some property and court documents. Where a document needs the company's execution, the same authority rules apply whether it is signed on paper or electronically.
- Use a reputable e-signature platform with an audit trail.
- Confirm that the counterparty and any bank accept electronic execution for the document concerned.
- Keep the completed electronic record with the company's contract files.
Self-check: where do you stand?
| Question | If the answer is no |
|---|---|
| Is there a written board resolution setting signing authorities? | Pass one |
| Does your bank mandate match the current directors and signatories? | Update it |
| Are chops and any common seal kept securely? | Lock them away and keep a log |
| Do contracts show the correct full company name? | Correct your templates |
| Are signed originals of key contracts retrievable? | Create a contract register |
- Board resolutions on signing authority and bank mandates.
- Ordering company chops and common seals.
- Execution blocks for contracts and deeds, with lawyers where needed.
In summary
- A common seal and chop are optional in law.
- Execution by authorised signatories is what counts.
- Control and log the use of chops.
Official references
- Companies Ordinance (Cap. 622), sections 124 to 128: common seal and execution of documents
- Electronic Transactions Ordinance (Cap. 553)