10 points making Contract with China Company

China on Path to Become Second-Largest Economy after US. You might have a great chance in doing business with Chinese company in China.Like it or not ,there are some tricks that you need to learn before getting yourself in the business.And one of the most important aspect you should know is making and checking a contract with China company.

Below listed Ten key points you should know when making and checking a contract.

1) The contract must have Chinese version
The Chinese government will not help you to translate your contract from french or Spanish to Chinese when they read it. only the contract with Chinese version can be acceptable and looked as the valid document in china.

2) Sending money to your vendor’s appointed bank account means nothing in China

There is a different concept between western country and china about what legal force it can represent when sending money to another party. In China, it could not certify there existing any trading relationship between the funds receiver and sender if you don’t have a contract. the money you send to the vendor will disappear in the air without any reason if there is not a legal contract can protect you.

3) Chops

A legal formed company in China should have at least three chops. they are called company chop, finance chop and private chop of legal person. the shape of company chop and finance chop of foreign company is ellipse. the shape of company chop and finance chop of Chinese company is round. all the private chop of legal person should be square.

4) How to verify is it a real seal for the chops

In China ,All  companies should go to the local security bureau to apply making necessary chops during setting up a business. You can go to make them after you get the approval from the local security bureau. then you should go back to the local security bureau to make a seal sample on the special chop card the security bureau gives to you. there are two same chop cards. the security bureau keeps one and the company keeps one, only the chops which leaves seal on the chop card are legal.I know this is tricky..

5) The basic structure of a contract

There should have parties, date, location of signing, production, quantity, quality, unit price, shipping terms, rights and obligation of all parties.

6) Basic verification of Chinese companies

You can visit local officials websites from local Administrative Bureau of Industry and Commerce, the sole government organ responsible for company registration in China and sometimes you can check out your supplier on their website. If you cannot speak Chinese, you can also ask a local Chinese to contact local officials and check out your supplier on your behalf in China. You'd better check them out before signing a formal contract with them in China.

7) The legal force of company seal and signature of legal person

the company seal and the signature of legal person has equal legal force. either of them can represent the company.one letter’s difference in the company’s name means they are two different company in one contract, the name of the parties in title, in content and in the seal should be exactly same. they represent different companies although there is only one small difference in the company’s name.

9) Parent company and subsidiary company

Parent company will take any legal responsibility of his subsidiary company. they are two separate independently company. if the title of one contract is the name of the parent company and the seal at the end is his subsidiary company, the contract is illegal.

10) The legal force of original document and copy

Please don’t hesitate to ask for the original contract no matter how complicated it goes. Anyone ,i mean anyone in your vendor’s company can make a fake contract and fax to you. also, the legal force of copy contract is much lower than an original contract.

Some people have done business in China over couples of years, but they will still make mistakes in the points we mentioned above. Remember ,It is very difficult to fetch up your loss if there is not a correct legal contract to protect you. every small detail should be pay attention to when signing a contract in china.

Originally posted By:decentliving.blogspot.com
Reference source: Pathtochina company

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