Since ancient times, when noblemen were unable to read or write, seals were used as a trusted means of authenticating documents. Over the centuries, the legacy of the seal has continued, symbolizing authority, authenticity, and approval in official documentation.
If you are operating a business in India, having a common seal of the company—also known as a corporate seal—is often recommended for formalizing important company documents.
In essence, the common seal acts as the official signature of the company, signifying that a document has been executed with the company’s full authorization. Many companies adopt a seal from the very start of their operations as part of good governance.
In this article, we’ll explore in depth the meaning, use, legal significance, and practical application of the common seal of a company—and how it plays a role in your business operations.
Common Seal of Company – Meaning & Definition
A common seal of a company, also known as a company seal, is an official stamp used to emboss documents with the company’s name. It serves as a mark of authenticity and signifies that a document has been executed on behalf of the company by its authorized officers.
Definition:
The common seal is a metallic or rubber stamp that creates a blind (raised) impression of the company’s name on official documents. It acts as additional evidence that the document has been properly approved and executed by the company.
In legal terms, it represents the company’s signature and is often used on:
- Share certificates
- Official contracts
- Board resolutions
- Legal documents submitted to authorities
While the use of a common seal is no longer mandatory in many jurisdictions (due to the rise of digital signatures and simplified company law), some companies still use it for ceremonial or formal documentation purposes.
Need for a Common Seal of Company
Since a corporation is an artificial entity, it cannot act on its own; consequently, it acts through its Board of Directors to carry out its activities and enter into numerous agreements.
The common seal of the company serves as the business’s signature and binds the company to all obligations undertaken by the corporation. It must be utilized following the Articles of Association and the Companies Act of 2013. Any document bearing the business’s seal and officially signed by an authorized officer of the company becomes legally binding on the company.
The Board should adopt the Common Seal of company by a resolution. Generally, the Common Seal of company is adopted at the first Board meeting. The image of the Common Seal should be recorded in the session at which it is established.
Importance of a Common Seal of a Company
The common seal of company’s custody should be regarded very seriously. It must be emphasized that the directors of the firm, i.e., the Company Seal should be accessible to or authorized for use by the members or the designated person. When the company seal of a company is being used, it must be signed by a Board and a Designated Person or another member.
The secretary’s responsibilities and duties are determined by the size and structure of the organization, as well as the personal contractual arrangements made with him/her. The right to sign the document instruments carrying the company seal of a company is granted to a director.
Companies with Common Seals are permitted to utilize Official Seals outside of Kenya. It is worth noting that when a Company’s Official Seal is properly affixed to a document, it has the same impact as the Company’s Common Seal.
How is a Common Seal of Company practiced?
The company’s seal shall not be attached to any document unless authorized by a decision of the Board or a supervisory board, and only in the comprised of at least executive members and the superintendent or such other person as the Committee may designate for the intent, and those executive members and the superintendent or such other person as the Committee may designate for the period shall sign every component to which the common seal of company is affixed in their existence.
Every certificate must be issued under the Company’s seal, according to the Articles of Association of a Company Limited by Shares – Article 2(ii) of Table F.
The Board shall ensure for the secure custody of the seal, according to the Articles of Association of a Company Limited by Guarantee and not having Share Capital – 79(i) and (ii) of Table F, as well as 30(i) and (ii) of Table H.
Enactment of the Companies Act in 1956
The consequence of a company’s registration under the Companies Act, 1956 is dealt with under Section 34 of the Companies Act, 1956.
It states that “As of the date of incorporation stated in the certificate of incorporation, such of the subscribers to the memorandum and other persons as may from time to time by members of the company be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company and having perpetual success and a common seal, but with such liability on the part of the members to contribute to the assimilation of the company’s assets.”
The evidence was the common seal, which was put by a company or corporate body on any document executed by it and was duly executed by the company or corporate body’s authority. The seal does not have to be a specific size, shape, or material. The word ‘Corporate seal’ is usually included in the common seal, as well as the company’s name, location, and date of establishment.
Authorization for Common Seal of company
Section 36A(3) of the British Companies Act was enacted. The owning and the use of common seals by corporations has been prohibited under that law. Section 45(1) of the English Companies Act, 2006 states that a company may but is not required to have a common seal.
According to Section 5 of the Information Technology Act of 2000, where any law requires that information or any other matter be authenticated by affixing the signature of any document shall be signed or bear with the signature of any person, such requirement shall be deemed to have been satisfied if such information or matter is authenticated employing a digital signature placed in the way indicated.
As a first step, the Central Government eliminated the common seal of company in the LLP Act. The LLP Act makes it optional to use a common seal. It is entirely up to the LLP whether to have it or not.
Documents That Require the Common Seal of a Company
While the use of the common seal is no longer mandatory in many jurisdictions, certain important documents may still require it, especially when specified in the Articles of Association or as per legal and regulatory requirements.
Here are some key documents where affixing the business seal is typically required or customary:
1. Share or Equity Certificates:
Share certificates must be authenticated according to the company’s Articles of Association. The common seal, along with signatures of authorized directors and/or the company secretary, is often used to validate these certificates.
2. Power of Attorney:
When a company issues a power of attorney—especially to authorize someone to act on its behalf in a foreign jurisdiction (e.g., outside India)—the common seal is usually affixed to legitimize the document.
3. Proxy Instruments:
If a proxy form is issued or signed by a corporate entity (especially for voting rights in meetings), the common seal may be required to validate the authorization.
4. Inspector’s Report under Section 223 of the Companies Act, 2013:
If an inspector appointed by the government prepares a report, any official documentation or submission involving that report may require authentication using the seal, depending on the context.
5. Winding-Up Documentation:
During the winding-up process of a company, the liquidator may be required to execute documents that involve the common seal, especially when dealing with asset distribution or legal filings.
Common Seal Register
Every firm is required to keep a record at their registered office that lists information about documents with the common seal attached.
The information below must also be included in the common seal register:
- Description of the record
- The number and date of the decision permitting the affixation of the common seal
- The date the document’s seal was applied
- Names of the witnesses to the affixation
- The location where the record’s seal was applied
The common seal has to be maintained in the possession of a director, company secretary, or any other official designated by the Board. A company owner, the executive officer, or any other person in power by the Council should have access to the common seal of company.
- Steps to get a new corporate seal
- Go to a nearby office supply store.
- Create your corporate seal.
- Select an embosser.
- Obtain the corporation seal.
Conclusion
While the use of the common seal of company has become optional in many regions, it continues to hold legal and ceremonial value for corporations that wish to formalize their official documents. It provides a layer of authenticity, minimizes the risk of document fraud, and signifies the company’s formal commitment. Maintaining a seal register and using it in compliance with your Articles of Association ensures regulatory alignment.
If you’re looking to set up a business globally without the legal hassle, OnDemand International’s incorporation experts are here to help. Whether you’re starting fresh or expanding globally, we ensure your documentation is compliant, professional, and seal-ready. Reach out to our experts to register your business today.
FAQ’s
The common seal is a metal stamp used by a company to officially endorse documents. It acts as the company’s signature and is typically used with the approval of the Board of Directors. The seal carries the company’s name and, in some jurisdictions, the state or country of incorporation.
No, having a common seal is not mandatory in many countries today, including India (after the Companies Amendment Act, 2015). However, a company may choose to use one for executing documents such as share certificates, official contracts, or deeds—especially when dealing with international or legal authorities.
One common example is the issuance of share certificates in India, where companies may affix their common seal. It can also be used on official contracts, loan agreements, property deeds, and legal instruments, especially when notarization or formal execution is required.
A company may use its common seal when executing formal documents that require official company authorization. Usage must be approved by the Board of Directors or according to the company’s Articles of Association. While not always legally required, it adds authenticity and formality to the document.
No, the design and content of a common seal may vary. However, it typically includes the company’s name and sometimes the place of registration. There is no universal format, but all seals must be legible and comply with local company law requirements.
The standard format generally includes:
- The full name of the company
- The place of incorporation or registration (optional in some regions)
- Circular design, often etched in metal
Some seals also include the year of incorporation or the term “Common Seal” engraved for clarity.
