This service is a core module of China Compliance Risk Review™, designed to support the overall compliance infrastructure for China operations.
In China, the most difficult risks to reverse are not contractual terms but seals that have already been used.
In China operations, company seals, contracts, and key documents are often treated as administrative matters, yet they carry significant legal and governance consequences.
Many risks arise not from contract wording, but from:
Unclear seal usage boundaries
Misalignment between contract signing and authorization
Incomplete or non-traceable documentation
HQ learning of legal obligations only after execution
The Seal, Contract & Document Control module focuses on who can trigger legal consequences, on what basis, and whether those actions are explainable to HQ.
Why Seals and Contracts Are Governance Risk Hotspots
Under China’s legal and practical environment:
Company seals carry substantial legal weight
Seal usage often outweighs textual nuances
Third parties rely heavily on stamped documents
Common high-risk situations include:
Seals kept by a single individual
Seal usage detached from authorization logic
Contracts not centrally archived
Limited HQ visibility into executed obligations
These issues are rarely fixable after the fact.
Key Areas We Assess
1 | Seal Custody and Usage Boundaries
Whether seal custody is overly centralized
Whether different seal types are clearly distinguished
Whether seal usage corresponds to authorized matters
2 | Alignment Between Contract Execution and Authority
Whether signing strictly follows authorization structures
Whether contracts are executed without sufficient authority
Whether signing authority matches risk levels
3 | Contract and Document Traceability
Whether executed contracts are centrally archived
Whether records support HQ or audit review
Whether documentation enables retrospective explanation
4 | HQ Visibility and Risk Escalation
Whether HQ is informed of material contracts in a timely manner
Whether blind spots exist in contract reporting
Whether escalation thresholds are clearly defined
Common but Underestimated Risk Scenarios
Seals entrusted to staff for convenience
Contracts stamped after informal approvals
Local-only storage without HQ access
Staff turnover leaving contracts unexplained
These risks may remain dormant, but often surface abruptly during disputes, audits, or transactions.
What This Module Is Not
This module does not include:
Contract drafting or legal review
Seal custody or execution services
Legal opinions or certifications
Control system implementation
It is a governance- and explainability-focused design module, not a legal or execution service.
What You Will Receive
Risk assessment of seal and contract controls
Identification of high-risk usage scenarios
Evaluation of document explainability and traceability
A governance-oriented control framework
Position Within China Entry + Governance Package
This module:
Builds on authorization and payment controls
Anchors legal risk governance in China
Directly impacts HQ risk exposure and explainability
In China, contract risk often arises not from the contract itself, but from the seal that made it effective.
We do not make decisions for you; we only help you clarify facts and risks.
Phone : 400 800 7472
Email : info@rtfcpa.com
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