How to Use a Company Seal: Everything You Need to Know
How to use a company seal is something you may be faced with if your company has an important set of documents that need to be agreed on.3 min read
How to use a company seal is something you may be faced with if your company has an important set of documents that need to be agreed on by all managers, directors, or board members. Certain business transactions will require the company seal on a document to show confidence and full support of the corporation.
What Is a Company Seal?
A company seal is a way of confirming that a document is certified and agreed upon by all parties involved in the decision making. It is considered the official signature or mark of the corporation. A company seal will include:
- The registered company name
- The year of incorporation
- The state in which it was legally filed
- The company logo
The company seal is usually decided upon in one of the first meetings after incorporation. Once a company seal is adopted, documents signed, and minutes of the meeting recorded, the everyday business can begin. Documents that are sent or filed under company seals are often referred to as "deeds." Whereas documents sent or filed by hand are "written contracts."
The company seal must only be used with authorization from the company directors or appointed committee. When a company seal is given to a document, the signature of a director may also be required along with the countersign of another director, company secretary, or person appointed by the committee.
Traditionally, sealing wax was used to imprint a seal on company documents. More common today is the use of two metal plates engraved with the company seal. The emboss leaves a clear mark on paper when the plates are pressed firmly together. Alternatively, the seal may be left using an ink pad and a rubber stamp.
When Might You Need a Company Seal?
Important documents that might need a company seal are:
- Employment contracts
- Vendor agreements
- Sales agreements
- Minutes from meetings
- Loan documents
- Government applications
- Legal documents
- Membership certificates
- Stock certificates
If a company seal is needed overseas, the corporation can have an "official seal". This, as well as the information stated in the "common seal", will also state the overseas location in which it is to be used. When the official seal is used abroad, a single person or agent may be authorized to use it on the company's behalf.
Is a Company Seal Necessary Today?
As many businesses move with the times and transactions occur electronically, the company seal is used less and less. Some states will now recognize the signature of an individual who has been granted authority to act on behalf of the corporation rather than a company seal.
State corporation laws no longer require corporations to issue paper stocks, therefore many organizations have adopted electronic filing systems. While in the past corporate stock certificates needed to be issued to all stockholders and sealed to prove ownership of the stocks, today most stock brokers will issue and keep electronic files.
Tips for Using a Company Seal
- It is important to read the state law regarding company seal requirements.
- Individual state laws may say when and how you can use a company seal.
- Use a company seal only for official company business.
- A seal is considered the corporation's mark.
- Use the seal on all important company documents.
- Use the seal like the company's signature so that it is clear the company is acting.
- A company seal means the agreement enclosed is a corporate act.
- A company seal tells a person reading the document that the company supports the document.
- A seal on a certificate shows the corporation's approval.
- The seal must be kept in good condition.
- Even if the company seal is not a legal requirement it still presents authenticity.
- A fax, email, or photocopy of the seal can act in place of the original seal.
Generally, states still recognize the legal impact of a company seal, however, in the future, a company seal may only serve as a symbol of authenticity or a gesture by a corporation. If you are unsure whether your documents require a company seal it is wise to seek professional advice.
If you need help with how to use 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.