Common Seal
/ˈkɒmən siːl/
Discover the significance of a common seal, an official stamp used by companies to validate important legal documents and contracts, ensuring authenticity and trust.
What is a Common Seal in company law?
A common seal serves as a company's official signature for executing formal documents.
It typically contains the company's name and registration number, creating a raised impression on paper that proves the document's authenticity.
How does a Common Seal work in practice?
The common seal works by creating a physical impression on documents through embossing or stamping.
Two company officers usually witness the sealing process and sign alongside the seal to confirm its proper use.
When must a company use its Common Seal?
Companies must use their common seal when their articles of association require it for specific documents.
This typically includes share certificates, property transfers, and high-value contracts, though requirements vary by company constitution.
Where would I first see a Common Seal?
You'll most likely encounter a Common Seal requirement when signing important company documents like share certificates, property deeds, or major contracts that your company's articles of association specify must be sealed.
Who can authorise use of a Common Seal?
Only authorised company officers can use the common seal, typically directors or the company secretary.
The company's articles of association specify exactly who has this authority and under what circumstances.
What happens if a Common Seal is used incorrectly?
Incorrect use of a common seal can invalidate documents or create legal disputes about document authenticity.
Companies should maintain proper records of when and how their common seal is used to avoid complications.
Are Common Seals still legally required?
Most modern companies aren't legally required to have a common seal, as electronic signatures and standard document execution methods are widely accepted.
However, some traditional documents and older company constitutions may still require sealing.
How should companies store their Common Seal?
Companies should store their common seal securely, typically in a locked safe or cabinet with restricted access.
Proper storage prevents unauthorised use and ensures the seal remains in good condition for official document execution.
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