Define Common Seal: Everything You Need to Know
Generally, we may define common seal as the official seal used on legal documents to identify a specific business or agency.3 min read
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.
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.
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
- 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.
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.
If you need help with a common seal for your corporation, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.”