Who can bind a Chinese company?
The legal representative, the company seals, the acts that need a resolution — and what to ask for before a signature in mainland China
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A contract with a company registered in mainland China is usually signed by one person and stamped with a red seal. Each tells you something; neither tells you everything. The law names one person who acts for the company on his own — the legal representative — and the courts look at who held the authority when the seal was affixed, not only at the seal. Some acts, guarantees first among them, need a decision of the board or of the shareholders whatever the signature. This note sets out who can sign, what each seal is for, which acts need more, and what to ask for before you sign.
Who is the legal representative, and where do you find the name?
Under the Company Law as revised with effect from 1 July 2024, the legal representative (法定代表人) is, as the articles of association provide, the director or the manager who carries out the company’s affairs (art. 10). There is one per company. The name is a registered particular (art. 32; Regulations on the Registration of Market Entities, art. 8), printed on the business licence (art. 33) and published on the National Enterprise Credit Information Publicity System (GSXT). A legal representative who resigns as director or manager is deemed to resign as legal representative, and the company must appoint a successor within 30 days (art. 10).
What the legal representative does in the company’s name binds the company. Limits on his powers set by the articles or by the shareholders cannot be raised against a counterparty acting in good faith (Company Law, art. 11; Civil Code, art. 61). A change of legal representative is registered on an application signed by the new one (Company Law, art. 35); until it is registered, it cannot be raised against a counterparty in good faith either (art. 34). The register on the day of signing is therefore the reference.
| Term | What it means in practice |
|---|---|
| Legal representative 法定代表人 | The one person who acts for the company by law, without a power of attorney. Registered and shown on the licence. |
| Director, executive director 董事 | Member of the board; a small company may have a single director instead of a board, who may also be its manager (art. 75). |
| Manager (general manager) 经理 | Runs the business under the board. The title alone gives no power to bind the company beyond his duties. |
| Senior officers 高级管理人员 | The manager, deputy managers, the finance officer, the board secretary of a listed company, and anyone else the articles name (art. 265). Filed with the registry, not registered. |
| Branch person in charge 分公司负责人 | Heads a branch, which has its own licence but no legal personality: the company answers for it (art. 13). |
| Authorised agent 委托代理人 | Signs under a written power of attorney from the company, within its terms. |
An employee acting within his duties also binds the company (Civil Code, art. 170), and so may a person whom the counterparty had reason to believe was authorised (apparent authority, art. 172). Directors, supervisors and senior officers are filed with the registry (Regulations on the Registration of Market Entities, art. 9) and listed on the GSXT, but no register shows the scope of their powers.
What are the company seals, and what does each one do?
No statute defines the company seal. A State Council notice of 1999 (Guofa [1999] No. 25) requires the seal of an enterprise to be round, no more than 4.5 cm across, with a five-pointed star at its centre and the company’s full legal name around it; special-purpose seals must differ from it in name and design.
One seal, under police control. The company seal is not an office stamp that anyone may order. Since 2017 a seal no longer needs the prior approval of the public security bureau (PSB), but the whole chain remains under its control (State Council, Guofa [2017] No. 7): only engravers filed with the PSB may make it; the engraver checks the company’s documents and, within one day, reports the seal, its impression and the documents to the county-level PSB, where they are recorded in its seal information system (Interim Rules on the Engraving Trade, as revised in December 2024, arts. 3 and 5). Local rules allow only one seal bearing the company’s name — in Zhejiang, for instance, the name seal “may be engraved only once” (Zhejiang seal measures, art. 9). A lost or stolen seal is reported to the police and publicly declared void before a replacement, visibly different, is made (art. 10), and several provinces let the public check a filed impression online. In most Western countries, by contrast, a company stamp has no legal standing of its own and can be ordered from any print shop: what commits the company is the signature of an authorised person.
| Seal | What it is used for |
|---|---|
| Company seal 公章 | The company’s general seal: contracts, letters, resolutions, filings. The one that commits the company in all matters. |
| Contract seal 合同专用章 | Contracts only. Often used instead of the company seal for day-to-day commercial agreements. |
| Finance seal 财务专用章 | Bank transactions, payments and accounting documents; deposited with the bank as part of the specimen seals (预留印鉴). |
| Invoice seal 发票专用章 | Affixed on paper invoices; it bears the company’s taxpayer number. |
| Legal representative’s name seal 法定代表人名章 | A personal seal bearing the legal representative’s name, used mainly with the finance seal at the bank. It does not replace the company seal on a contract. |
| Department or project seal 部门章 / 项目章 | An internal seal. It has no authority of its own to commit the company. |
| Electronic seal 电子印章 | A reliable electronic signature or seal has the same legal effect as a handwritten signature or a physical seal (Electronic Signature Law, art. 14). |
A written contract is formed when the parties sign, seal or fingerprint it (Civil Code, art. 490). The seal is a means of proof, not the source of authority. In the Minutes of the National Courts’ Civil and Commercial Trial Work Conference (Fa [2019] No. 254, point 41), the Supreme People’s Court tells the courts to look mainly at whether the person who affixed the seal had authority at the time. Where the legal representative or an authorised agent seals a contract with the company seal, the company is bound and cannot deny it because the seal later proves to be false, differs from the seal on file with the police, or because the signatory has since lost his position. A genuine seal used by a person without authority is judged by the rules on agency and apparent authority.
Which acts need more than a signature?
Some acts are not the legal representative’s to decide. An investment in another enterprise or a guarantee of the debts of others is decided by the board or the shareholders, as the articles provide (Company Law, art. 15); so is a contract with a director, supervisor or senior officer (art. 182). For a listed company, assets bought or sold, or guarantees given, above 30% of total assets within one year need two-thirds of the shareholders’ votes present (art. 135).
The Supreme People’s Court’s Interpretation on the guarantee provisions of the Civil Code (Fa Shi [2020] No. 28, in force 1 January 2021) draws the consequence. A guarantee signed by the legal representative without the required resolution binds the company only if the counterparty acted in good faith — which in general means it reviewed the resolution; otherwise the company is not bound and owes at most compensation (arts. 7 and 17). The missing resolution cannot be raised for a letter of guarantee from a financial institution or a guarantee company, for a wholly owned subsidiary, or where shareholders holding over two-thirds of the votes signed — the last two not for listed companies (art. 8). A listed company is bound by a guarantee approved in its published announcements (art. 9). A guarantee given by a branch without a decision of the company does not bind it, unless the counterparty neither knew nor should have known (art. 11).
| Act | Who decides | What to ask for |
|---|---|---|
| Guarantee for a third party, or investment | Board or shareholders, as the articles provide | The resolution and the articles |
| Guarantee for a shareholder or the actual controller | Shareholders, the shareholder concerned not voting | The shareholders’ resolution, with the vote |
| Contract with a director or officer | Board or shareholders, as the articles provide | The resolution approving it |
| Listed company: assets or guarantees over 30% of total assets in a year | Shareholders, two-thirds of the votes present | The published announcement of the resolution |
| Commitment signed by a branch | The company, for a guarantee | The branch licence and the company’s written decision |
What should you ask for before a signature?
In mainland China the red seal carries great weight, and rightly so — but the courts ask who held the authority when it was affixed. Check the legal representative on the register on the day, the capacity of whoever signs, the seal against the registered name and, for a guarantee or a major transaction, the resolution behind it. The register gives you the first; the counterparty must give you the rest.
How can CCSS help?
For a company registered in mainland China, the Company Profile Report sets out, in English and in Chinese, the legal representative and the other persons in charge, the officers on file, the shareholders and the share capital, as recorded in the official register. Ordered on the day of signing, it tells you whether the person in front of you is the one on the register. It is delivered in seconds, upon order.
When the articles of association or the resolutions themselves are needed, the China Archive Documents (AMR filings) Report (USD 2,500 per report, restricted access, delivered within 5 days) retrieves the signed filings held in the archives of the local Administration for Market Regulation.
www.china-company-search.com — Report Types › Company Profile Report