Meaning
Administrative record keeping defines the seal custody log as a mandatory ledger for tracking the physical possession and transfer of official company chops or seals. Chinese corporate law requires this document to verify that every impression made on a contract or bank instruction carries authorization from the legal representative or the board. It specifies the date of use, the name of the designated custodian, and the identity of the person applying the stamp to the underlying document.
Custodian Accountability
Responsibility for the security of these impressions rests upon a single appointed official who maintains the physical environment where the stamp resides. Internal audit procedures dictate that this person must record the specific reason for every cycle of use to prevent unauthorized signing of binding agreements. Failure to maintain accurate entries creates legal vulnerability for the enterprise because courts consider the seal the primary evidence of corporate intent in disputes.
Verification Protocol
Verification of the seal custody log happens during the annual inspection of legal status by the State Administration for Market Regulation. Inspectors confirm that the logs align with the board resolutions and the documented business activities of the company over the previous fiscal period. Discrepancies between the ink impressions found on public filings and the recorded entries inside the ledger lead to penalties for noncompliance.
Operational Enforcement
Enforcement practice shifts the burden of proof to the entity when a seal custody log displays gaps or unauthorized entries during a forensic review. Foreign parties rely upon this internal control to demonstrate that a specific contract signature fell within the scope of the person authorized by the company articles of association. An accurate ledger acts as the final barrier against fraudulent corporate actions within the jurisdiction.
