Company seal

3 key takeaways

• A company seal is an official stamp used to endorse formal documents.
• It signifies the company’s approval and authenticity of the documents.
• The use of a company seal is largely ceremonial today but still holds legal significance in certain jurisdictions.

What is a Company Seal?

A company seal is an embossed emblem or stamp that is used to imprint the company’s name on documents, signifying official approval and authenticity. Historically, the seal was a mandatory requirement for validating company documents, such as deeds, contracts, and board resolutions. It served as a company’s signature, symbolizing the binding nature of the document. Although its use has diminished with the advent of electronic signatures and modern business practices, a company seal is still used in some jurisdictions and for specific types of documents.

Importance of a Company Seal

• Authenticity: A company seal provides assurance that the document is genuine and authorized by the company.
• Tradition: It maintains the historical practice and adds a formal touch to important documents.
• Legal Requirement: In certain jurisdictions and for specific documents, the use of a company seal is still legally required.

How a Company Seal Works

Creation of a Company Seal

When a company is incorporated, it may create a seal that includes the company’s name, registration number, and the year of incorporation. The design is then used to create a physical embossing tool.

Use of a Company Seal

• Endorsing Documents: The seal is pressed onto documents to leave an embossed imprint, signifying the document’s legitimacy.
• Authorized Signatories: Only certain individuals, such as company directors or officers, are authorized to use the seal. This ensures that the use of the seal is controlled and properly recorded.
• Record Keeping: The application of the seal is often recorded in a company’s minute book or official records, providing a trail of documentation.

Types of Documents

• Contracts and Agreements: To signify formal agreement and commitment.
• Deeds: Especially for property transactions where a seal may still be a legal requirement.
• Share Certificates: To validate the authenticity of issued shares.
• Board Resolutions: To formally approve and record significant decisions.

Examples of Company Seal Use

• Property Transactions: A company might use its seal when signing deeds related to buying or selling property, ensuring the document’s validity.
• Official Letters: In some cases, companies use seals on official letters to add a level of formality and authenticity.
• Legal Documents: Some jurisdictions require a company seal on legal documents, such as powers of attorney or loan agreements.

Real-world Application

• Corporate Governance: The use of a company seal can be part of good corporate governance practices, ensuring that significant documents are properly endorsed.
• International Transactions: In international business, some countries still regard the company seal as a vital part of document authentication, making it important for companies operating globally.
• Historical Preservation: For companies with a long history, the continued use of a seal can be a way to preserve tradition and reinforce the company’s heritage.