Key Takeaways

  • A company seal is an official mark used for corporate authentication, now mostly symbolic but still legally significant in specific contexts.
  • Uses of company seals include finalizing board resolutions, deeds, stock certificates, and other high-level legal documents.
  • Different states and countries have varying requirements regarding the use and necessity of a company seal.
  • Company seals come in various forms, including embossers and digital seals, offering flexibility for modern business needs.
  • UpCounsel can connect businesses with experienced lawyers for guidance on acquiring and using a company seal effectively.

How to get a company seal is a business step that many new business owners wonder about. Although the company seal is no longer required, it can provide a sense of authenticity to a business document.

What Is a Corporate Seal?

A corporate seal is similar to a state seal except that it is the official seal of the corporation. A corporation is legally considered to be a separate entity from the individual members. This seal acts as the official signature of the corporation. The official signature, or seal, was once required to sign any official documents. This prevented individuals from making decisions without the other members of the corporation agreeing to them.

However, technology upgrades made it difficult to authenticate the corporate seal. Corporate seals are not used as often today. Corporate seals may still be used for bank accounts and other smaller corporate accounts, but they are not often used for legal documents anymore. Different states have different requirements as well, so it is important to check with your state if a corporate seal is needed for legal documents.

Historical Significance and Modern-Day Evolution of the Company Seal

The use of a company seal dates back to ancient times, serving as a critical tool for authentication and security. Historically, seals were made of wax and used to authenticate documents in an era before standardized signatures. While the need for corporate seals has diminished due to technological advancements, they remain a mark of authenticity and legitimacy. In modern times, digital and embossed seals have replaced traditional wax versions, making them more convenient and aligned with contemporary business practices.

What Is the Use of a Company Seal?

The company seal should only be used sparingly and for the most important of business transactions. It should not be used to record meeting minutes or for service level agreements. It should also not be used for vendor contracts. There are a few situations when it is appropriate to use the company seal:

  • Company resolutions
  • High-level contracts and deeds
  • Real estate transfers or land contracts
  • Loan documents and mortgages
  • International documents
  • Issuing stock certificates

Additionally, a company seal cannot be used without prior approval. The use of the company seal should be documented in the Articles of Association or in the board meeting's minutes. In many cases, the company seal must also be accompanied by the president's or CEO's signature.

Situations Where a Company Seal Is Mandatory or Beneficial

A company seal is not always a legal requirement, but its use can provide added formality and authenticity in several scenarios, such as:

  • Executing Legal Documents: Certain contracts, deeds, or international agreements might require a company seal to comply with legal formalities.
  • Finalizing Board Resolutions: Many corporations use a seal to endorse key resolutions passed during board meetings.
  • Stock Certificates: Providing tangible proof of stock ownership often involves affixing a company seal.
  • Loan and Mortgage Agreements: Financial institutions sometimes require sealed documents as part of their compliance protocols.

State laws vary, so it’s essential to check local regulations to determine whether a seal is mandatory in specific circumstances.

What Is the Power of a Company Seal?

Although the company seal is not used as often in today's business world, it still remains an official mark of corporations. Some legal documents today still require the company seal. Additionally, it is still an important part of board resolutions. Without a company seal, the resolution is considered to be invalid. Also, larger companies are still expected to have a company seal. Without one, it would be difficult to file certain legal documents.

Legal Implications and Limitations of a Company Seal

The company seal holds significant legal weight in jurisdictions where its use is mandatory. For example:

  • Validation: A sealed document is often presumed valid and properly executed unless proven otherwise.
  • Binding Nature: In some cases, a document without a seal may be deemed incomplete, especially in real estate transactions or high-value contracts.

However, misuse of a company seal can lead to legal disputes. Companies must establish clear guidelines for its use, such as documenting approvals in bylaws or board minutes.

How to Obtain a Corporate Seal for a Corporation

Although corporate seals were once made of wax, today they are a type of metal stamp. A corporate seal can be obtained by completing the following steps:

  • Register your corporation with the state. Corporations are governed by the state, not federally. It is important to register with the state because the state is often included on the corporate seal.
  • Head to a local office supply store. A corporate seal is not a mandatory part of registering a corporation, so you are not provided with a corporate seal by the Secretary of State. Instead, you can obtain one at an office supply retailer.
  • Design your corporate seal. It is up to you to design your corporate seal. However, most corporate seals do include the name of the corporation, the date incorporated, and the state that the corporation is registered in. Others will also include a corporate symbol.
  • Choose the embosser. The corporate seal is then set into an embossing device. You can choose a handheld or desktop embosser device.
  • Purchase the corporate seal. You will have to pay for your corporate seal.

Modern Alternatives: Digital Company Seals

As businesses increasingly go paperless, digital company seals have become a popular alternative to traditional embossers. These seals are secure, easy to use, and often integrated into electronic document workflows. Digital seals are legally recognized in many jurisdictions and provide a sustainable, efficient way to authenticate important documents.Steps to implement a digital seal:

  1. Select a Trusted Provider: Choose a provider specializing in secure digital solutions.
  2. Customize the Design: Include your company’s name, incorporation year, and registration state.
  3. Ensure Compliance: Verify that the digital seal meets the legal standards of your operating jurisdiction.

Official Stock Certificate

Official stock certificates are also not used as often as they were many years ago. Official stock certificates once were used as a title to the companies' stocks. It was an important part of proving ownership of corporate stocks. Today, however, many stock issuing and purchases are completed over the internet, making official stock certificates unnecessary.

Additionally, the state no longer requires that stock certificates accompany the stocks. Stock certificates are still sometimes used as evidence of stock ownership, instead of an official title. They are also used to display authenticity.

International Variations in Company Seal Requirements

Globally, the use and significance of company seals vary:

  • United States: Seals are largely optional but provide an added layer of formality.
  • United Kingdom: Company seals are not mandatory for private companies but are used in specific deeds or contracts.
  • Asia: Countries like China and Japan often require company seals for nearly all business transactions, making them an integral part of corporate governance.

Understanding local regulations can help ensure proper use of the company seal in international transactions.

Frequently Asked Questions

  • Is a company seal required by law?
    Not always. Requirements vary by jurisdiction, but a seal adds authenticity and formality to important documents.
  • Can a company seal be digital?
    Yes, digital seals are legally recognized in many regions and offer a convenient, secure alternative to traditional seals.
  • What should be included in a company seal?
    Most seals include the company’s name, incorporation date, and state or country of registration.
  • Who is authorized to use a company seal?
    The use of a company seal should be approved by the board and documented in the bylaws or minutes.
  • What documents typically require a company seal?
    Deeds, high-value contracts, stock certificates, and some international documents may require a seal.

If you need help with how to get a company seal, 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, Menlo Ventures, and Airbnb.