Key Takeaways

  • A common seal (or corporate seal) is an official emblem used to endorse and authenticate legal documents.
  • While often not legally required, common seals are still used to formalize agreements, especially for international compliance or corporate tradition.
  • Seals typically include the company name, incorporation year, and jurisdiction.
  • States like California and New York no longer require seals, but international jurisdictions may still mandate them.
  • The use of a common seal should be recorded in a Register of Sealings for transparency and internal governance.
  • Seals are commonly included in corporate kits and are used on stock certificates, legal contracts, and certain filings.

Generally, we may define common seal, also called a company or corporate seal, as the official seal used on legal documents to identify a specific business or agency.

Common Seal History

Seals were historically made with wax embossed with an imprint. Their use dates back thousands of years. Today, company seals are made with a machine that has an upper and a lower die that create an imprint when pressed together tightly. This can be done directly on paper or with red adhesive seals that imitate the wax seals of yesteryear.

Modern Use of Corporate Seals

Although it's not required for a business to have its own corporate seal, it can sometimes be useful to create one. However, technology advancements are slowly phasing out this aspect of contracts and other legal documents. A seal is usually used to make a document look official and authoritative.

If you do want a seal for your business, you can easily order one online through a professional incorporation services company. They provide corporate kits that include documentation for your business, share certificates, member certificates, and the seal itself.

Is a Common Seal Required by Law?

In the United States, most states—including Delaware, California, and New York—do not legally require the use of a common seal for corporations or LLCs. The signature of an authorized officer is usually sufficient to execute legal documents. However, some companies still choose to use a seal out of tradition or for ceremonial purposes.

That said, there are exceptions internationally and within specific legal contexts. A seal may still be required:

  • For certain foreign jurisdictions where a seal is recognized as an official mode of execution.
  • On official stock certificates or share issuances where bylaws or shareholders mandate it.
  • In company charters or Articles of Association that require sealing for particular acts.

Ultimately, while the legal requirement is rare, the seal may still serve practical or symbolic functions.

International Company Seal Requirements

If your company will be engaged in global business transactions, a company seal will be important since it is legally required in hundreds of nations. Many of these countries do not recognize legal contracts that do not include an official company seal.

In the United Kingdom, companies can use their official seal in place of an official signature on a legal contract. The company must pass a resolution dictating who is authorized to use the seal, and all uses must be documented in an official register. The seal is also recognized as an authorized replacement for a signature by German courts, although this is not recorded in the nation's statutes.

If your company opts to adopt an official seal, you must pass an official resolution to that effect and record the decision in the meeting minutes. You should also make a provision for an official seal register and designate which representatives of the company are authorized to use the seal.

Other international requirements for corporate seals include the following:

  • Australia: A seal is not legally mandated except for companies formed before 1988.
  • Bahamas: A company seal is required, and proof of the seal must be provided when a new company files its first yearly income statement.
  • Barbados: Company seals are required and must include the name of the company.
  • Canada: No seal is legally required.
  • Croatia: Seals are legally required on all legal documents.
  • Greece: Companies must use a seal that includes their tax registration number.
  • India: Limited companies are legally required to use a seal.
  • Maldives: All companies must have a seal and register it with the Registrar of Companies.
  • Mauritius: All companies are legally required to use a company seal.
  • Republic of Ireland: All limited companies must use an official seal.
  • Russia: All companies are legally required to use a seal.

Even in countries where the use of the seal is not legally required, many companies opt to use one so that contracts will be legally recognized in foreign nations. Many lawyers and legal professionals will also request that official documents be sealed. The seal also allows you to have just one authorized signatory rather than the two needed when a seal is not used.

Practical Benefits of Using a Common Seal

Even when not required, using a common seal can offer several benefits:

  • Authenticity: Provides a visual confirmation that a document is officially endorsed by the company.
  • Standardization: Helps in keeping document formalities consistent across departments or international offices.
  • Authority Control: Restricts the authority to sign key documents, especially when used with a seal register.
  • Investor Confidence: Can help convey professionalism and legitimacy to shareholders and investors.

Using a seal can also reduce the number of required signatories on certain documents, provided the company’s internal governance allows it.

Company Seal Elements

The company's seal must contain the business's name, the year it was incorporated, and the state of incorporation. You should consider using the seal on documents such as:

  • Contracts with vendors and employees
  • Sales agreements
  • Leases
  • Legal commitments
  • Loan documents

Ideally, the company should adopt a seal right after incorporating so that it can be used on membership or stock certificates. These must often include the signature of the company's president. Taking these steps can make it more difficult for someone to present fake stock certificates in an attempt to fraudulently claim ownership in the company.

How to Order and Customize a Common Seal

Ordering a common seal is a simple process. Businesses can purchase one through online incorporation service providers, legal supply companies, or stationery vendors. When customizing a seal, ensure it includes the following:

  • Company’s full legal name
  • Year of incorporation
  • Jurisdiction (e.g., “Incorporated in Delaware”)

Some seals also include decorative elements such as a logo or border. Seals may be:

  • Embossing Seals: Leave a raised impression on paper
  • Red Wafer Seals: Adhesive labels often used with embossers
  • Ink Stamps: Less common but used in some informal contexts

When ordering, choose a format compatible with your company’s documentation style and ensure it aligns with any jurisdictional requirements.

Register of Sealings

Your register of sealings should be kept at your company's official business address to protect the seal from unauthorized use. Every transaction with the seal should be recorded in this register.

Best Practices for Managing a Company Seal

Proper control and documentation of seal usage is essential to prevent unauthorized use and maintain legal compliance. Best practices include:

  • Restrict Access: Limit possession of the physical seal to a corporate officer or secretary.
  • Maintain a Seal Register: Record each use with date, purpose, and signatories involved.
  • Review Periodically: Conduct internal audits of seal usage to ensure accountability.
  • Bylaw Inclusion: Include seal usage provisions in company bylaws or the operating agreement.
  • Backup Measures: Have a backup seal securely stored offsite, if applicable.

Companies that use a seal across multiple jurisdictions should tailor procedures to accommodate local legal and business customs.

Frequently Asked Questions

  1. What is a common seal used for?
    A common seal is used to officially endorse documents, such as contracts, stock certificates, and international agreements, making them appear formal and authenticated by the company.
  2. Is a company required to have a common seal?
    In most U.S. jurisdictions, no. Common seals are optional unless required by company bylaws or international legal obligations.
  3. Can an LLC use a common seal?
    Yes, LLCs can adopt and use a common seal, even though it's not legally mandated. It can help formalize internal or external documents.
  4. How do I get a corporate seal for my company?
    You can order a corporate seal online through incorporation service providers or legal stationery suppliers. The seal typically includes the company name, incorporation date, and state.
  5. What documents should be sealed?
    Common documents include partnership agreements, stock certificates, deeds, resolutions, loan documents, and international contracts—especially when required by local law.

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