Japan Visa Article- Hanko
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Japanese Hanko Seals

{The following is based on an article originally written for the newsletter of the Japan Foreign Lawyers Association (RBA).}

Background

One quite unique aspect of Japanese business is the use of hanko seals rather than signatures for a range of official and non-official purposes. These purposes include executing official documents and managing bank accounts.

Hankos are sometimes referred to in English as:

  • Corporate seals.
  • Company stamps.
  • Company chop.
  • Company chop.
  • Inkan.

For convenience we will use the terminology hanko or simply seal.

It is important that foreign management have a basic understanding of the hanko system since it has implications for internal control in the Japan operation.

Types of Hanko

Typically, a Japanese company will have several types of hanko including:

  • A formal “jitsu-in” which is registered with the Japanese Legal Affairs Bureau. In English this may be referred to as the Registered Company Seal.
  • A “ginko-in” bank seal for banking transactions. The “ginko-in” seal is registered with the bank.
  • An informal and unregistered “mitome” seal. This is used for simple administrative tasks such as receiving courier packages delivered to the office.
  • An informal “kaku-in” seal. Traditionally such seals have been applied to finalized invoices prior to being sent to customers.

We will now look at each of the above in more detail including a discussion of appropriate internal controls.

1. Registered Jitsuin Hanko (Registered Company Seal)

  1. Use

    The formal jitsuin hanko will be used for all official and important purposes including:
    • Tax returns and other official documents for the tax office
    • Leases
    • Important contracts
    • Payroll
  2. Controls

    The individual with responsibility for the custody and application of the formal jitsuin hanko will depend on factors such as the size of the company. However, it would usually be held by a director level individual or the manager of the accounting department.
  3. Inkan Shomei – Certificate of Registered Seal

    If a transaction is significant, for example an important contract or a lease agreement, the counter-party may request that the company provide a fresh (meaning issued within the past 90 days) certificate of registered seal (inkan shomei) from the Japanese Legal Affairs Bureau. This certificate can be used to verify that the seal being applied to the contract is genuine.

2. Bank Seal (“Ginko-in” hanko)

  1. Use

    The bank seal is registered with the bank when an account is opened. It is then used for all over the counter transactions in place of a signature.
  2. Controls

    Again, the individual with responsibility for controlling the bank seal will depend on factors such as the size of the company and also how often over the counter transactions are required. In most cases, transactions will be done online hence there will be little day-to-day need to access the bank seal.

    Custody of the bank seal will typically be the responsibility of a director level individual or the manager of the accounting department.

    Given the ability of the bank seal to operate the bank account, such seals are usually kept inside a locked desk or sometimes in a safe.

    There is some risk associated with allowing employees other than a director or manager to have access to the bank seal. However, this may need to be weighed against the practical need to operate the bank accounts.

3. Unregistered “Mitome” Hanko

  1. Use

    Mitome are used for routine office transactions. For example, confirming a document has been sighted or “signing” for a courier package received at the office. These seals simplify day to day processes.
  2. Controls

    Given the routine nature of the transactions associated with the mitome seal, it is generally not necessary that staff obtain approval each time the seal is used.

    Typically, mitome are kept inside a locked drawer.

4. Unregistered “Kaku-in” Seal

  1. Use

    Traditionally a “kaku-in” was added to an invoice to signify approval before it was sent out. However, with the advent of electronic invoicing “kaku-in” are now less common and some companies may not use them at all. That said, some traditional Japanese customers may insist on receiving a hard copy invoice sealed with a “kaku-in”.
  2. Controls

    If the company has a “kukuin in”, it would usually be held by the accounting department inside a locked drawer.

Contact JAPAN VISA™ to learn more about best practices surrounding the use and safekeeping of hanko seals in Japanese companies.

The above is provided for general information purposes only and does not constitute advice to undertake or refrain from undertaking any action. Only qualified Japanese professionals are able to advise on Japan immigration, legal, and tax matters.