What is a Corporate Seal: Everything You Need to Know
In addition, company secretaries usually carry the seals and will use the them on behalf of a corporation. This is considered an official signature of the company.3 min read
2. Seal Creation Steps
3. State Seal Laws
A corporate seal is a tool used to stamp a company signature on an official document. Such a seal conveys a company’s agreement to the contents of a document. The seals contain the following attributes:
- Incorporation state
In addition, company secretaries usually carry the seals and will use the them on behalf of a corporation. This is considered an official signature of the company. Any official or legal document that derives from a corporation requires a corporate seal. Traditionally, documents were usually validated through a seal because illiteracy was historically more common.
Today, however, corporate seals can be used to officiate bank accounts or deeds. With that, even such uses of a corporate seal are not as prevalent. Instead, state laws mandated an individual signature from an authority within the company, such as a director or CEO. In the past, corporate seals were imprinted on documents using wax. However, rubber stamps became a more common way of imprinting seals onto documents.
Corporate Seal Validity
Most states do not require corporate seals because they do not have vital legal meaning. Moreover, the use of unsealed and sealed documents no longer exists. Some documents that may require corporate seals include:
- Agreements of sale
- Various commitments by a company
- Minutes from director meetings
- Vendor or employment contracts
Any business could adopt a company seal and change it when necessary. Such a decision is made in organization meetings called by the company director, and such a meeting is usually conducted after a company receives incorporation. When a meeting is conducted with all official paperwork signed and sealed, an LLC or corporation has the authority to host daily operations of the company.
One of the first mandates of such a meeting would be stock issuance, in the case of a corporation, or membership issuance in the case of LLCs. Moreover, corporate seals can be used to officiate stock or membership transfers. This is a vital step since the director resolutions and certificates provide evidence that such documents are official.
Further, it ensure that stock certificates are stamped properly and signed by the company president to prevent potential fraud.
Seal Creation Steps
When it comes to incorporation, you must first register in the state where you intend to operate. Since corporations are state-based entities, your seal may likely carry the name of the incorporation state.
After, you must design the seal. Due to a seal’s lower significance in today’s society, you have some leeway in designing corporate seals, but most carry the same type of information. The most useful aspects to include in a seal are:
- Company name
- Incorporation state
Lastly, you must pick an embosser and have the seal made. The stamp itself is made into a stapler-like device that allows you to apply it wherever you deem necessary. Before designing it, you must consider the following:
- Build quality
To find out more, you may contact an incorporation services company.
State Seal Laws
Statutes that govern state corporations permit the use and adoption of corporate seals. However, you must ask yourself if you truly need a corporate seal for your company. In states such as New York and California, you do not need corporate seals. For instance, California statutes give corporations the authority to use and adopt corporate seals, but having a seal has no effect on the validity of any documents or instruments.
Also, California civil codes goes into greater depths, declaring that distinctions between sealed and unsealed documents are meaningless.
Such a provision states clearly that seals have no legal ramifications in cases of document validation. Therefore, seals in California are considered relics, as is the case in New York. At one point, there was some value in assigning corporate seals to agreements in California, even though it was not necessary to validate agreements because seals created rebuttable presumptions that officers signing the agreements had the legal authority to do so.
In New York, officials noted that seals have some evidentiary value regarding the authority of officers who sign instruments on behalf of a company. A private seal in New York may entail something in the form of wax or wafer, or any adhesive substance that’s affixed to a document. It can come in the form of nothing more than letters such as “L.S.” or the word “seal.”
To learn more about corporate seals, you can post your need, or post your job on UpCounsel’s website. UpCounsel’s attorneys will provide greater insight into corporate seals and if they would be useful to your company. In addition, they will aid if you need help designing a legal seal that officiates documents.