Verifying PRC Corporate Seal Authenticity and Public Security Filings
Verify PRC seals by matching the 13-digit PSB security code against municipal police databases and confirming official Beian filing certificates before signing.
Article 50 Civil Code
Meaning
Statutory provisions governing the legal actions of corporate representatives dictate how contracts bind a legal person under regional regulations. The article 50 civil code establishes that the acts of a legal representative in the name of the legal person are binding on that legal person, unless such acts exceed the representative’s authority and the counterparty knew or should have known of the limitation. This provision balances transaction security with corporate internal controls.
Corporate Boundary
Corporate charters usually specify the exact limits of a general manager’s signing authority. When a representative acts beyond these bounds, the company may invoke the article 50 civil code to dispute the validity of the transaction. However, the burden of proof rests on the company to demonstrate that the counterparty acted in bad faith or possessed actual knowledge of the internal limit.
Judicial Execution
Chinese courts evaluate bad faith by examining the diligence of the counterparty during the contract signing process. If the transaction involved a standard corporate chop and signed agreements, the court generally presumes good faith, applying the article 50 civil code to hold the corporation fully liable for the representative’s commitments.
Contractual Protection
Foreign entities contracting with local firms must request official board resolutions and company charters to verify the authority of the signatory. This step prevents the local firm from later escaping its obligations under the article 50 civil code by claiming the representative exceeded their mandate.