The one person registered to act for a Chinese company, named on its business licence.
Under the Civil Code, the legal representative acts for the company by law, and what the legal representative does in the company’s name binds the company; internal limits on that authority cannot be raised against a counterparty acting in good faith (art. 61).
Anyone else, a sales manager or the owner’s relative, needs written authority. If the legal representative will not sign, ask for a power of attorney sealed by the company, and keep it with the contract.
The owner who is not on the licence
A common situation: the factory owner, the person the buyer has dealt with for months, is not the legal representative. The licence names a relative or a manager. That is not unusual in China and not a reason to walk away. It does mean that the person across the table signs as an agent and needs written authority.
The legal representative’s name is also worth searching. Check whether it appears in court enforcement records, either personally or as legal representative of other companies. A name that keeps appearing next to unpaid judgments tells you more about a supplier than its licence does.
When someone else signs
Add this to the signature page:
“Where any person other than the legal representative signs for the Supplier, the Supplier shall attach a power of attorney sealed with its company seal, naming that person and the scope of authority. The power of attorney forms part of this Agreement.”
Keep the original power of attorney, or a clear scan, with the signed contract. A power of attorney signed only by the person it names proves nothing; it needs the company seal.
Related terms
- Company seal and contract seal (公章, 合同专用章)
- Business licence and unified social credit code
- T/T (telegraphic transfer)
- All twelve terms
Read next
- Verify a Chinese Supplier's Court Records: The Enforcement Search Matters More Than the Lawsuits
- Chinese Supplier Background Check: Who You Are Paying, From the Official Registers
Sources
- Civil Code of the PRC (effective 1 January 2021), article 61, full text on the Ministry of Justice site ↗
- Translations are mine and unofficial.
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