Get to Know Common Seal or Company Seal

When it comes to executing legal files or documents, you should not forget about including a common seal or company seal in the process of authorizing. Common seals have two metal plates that will generate an embossed design or information as they are pressed together on a paper or sticker. Have you seen or known common seal before? Common seals are not the same as company stamps, so don’t get it wrong. Although they are both used to authorize documents, their applications are quite different. So, how is the application of the seal? Well, to find the answer and more information on common seals, let’s dive into the details below! 

1. The Purpose of The Common Seal or Company Seal 

So, as mentioned earlier, common seals are applied for executing documents. The seal represents that the document is approved by the company or organization, also the execution was the act and deed of them. Because the seal is a sign of official approval, before the board of directors or decision-maker give their official approval, the seal cannot be applied to the document. 

2. Application 

For common seal applications, here are a few points you need to know about! 

  • The seal is only applied to high-level or vital documents such as high-level contracts, company resolutions, international business documents, share certificates, etc. 
  • Common seals are not mandatory in all countries. 
  • The board of secretary or management committee has the responsibility to keep the seal. 
  • To make the application legal, a few rules must be followed. First, two officers must be witnesses when applying the seal. They can be the chief executive, executive director, or other authorized officers. Then the two officers should affix their signatures on the document as well. 
  • State laws regarding common seal application should be understood before using the seal. You can also ask a professional about the application. 
  • The application of the common seal and the company stamp is quite different. The seal is limited to vital documents only, but the application of the company stamp is not as limited as the company seal. 

3. Common seal in Singapore 

Since March 31th 2017 under the Companies (Amendment) Act, in Singapore, seals are no longer mandatory. So, there is no requirement for companies in Singapore to affix a common seal when executing legal documents. 

4. The Benefits of Using A Common Seal 

Although seals are not mandatory in some countries, many companies or organizations still apply them. Here is the reason why! 

  • Authenticity is important, especially for high-level and vital documents. That is the reason why the common seal is added as a sign of authenticity. 
  • Security is the next point why common seals are affixed to certain documents. Since it would be a nightmare if high-level and vital documents are being forged, then the utilization of the seal can minimize the risk of forgery. Why? The seal is more difficult to imitate compared with the signature and company stamps. 
  • Some businesses have their own common seal because they are affordable and easy to buy such as in company seal in Singapore. Also, they need a seal when having a business with international companies. 

Sonia Grand