What Is Common Seal?

A common seal (also sometimes referred to as a “company seal”) is a type of seal that is officially used by a company. Back in their beginnings, seals were mostly used in the field of justice, but nowadays, most countries do not make this a necessity. Furthermore, in the past, seals used to make an actual impression on wax on the documents, whereas today they are only indentations/impressions on the paper.

A company seal carries a great amount of power with it, basically because it means that a document (a deed for example) has been signed not only in the name of one of the company’s agents, but on behalf of the entire company itself.

Generally speaking, the company seals today are used in two kinds of actions: approving/signing deeds (depending on the laws of a specific country) and in approving/signing documents such as the share certificates (which certificate the fact that someone has a share in a company).

Bonds and other securities may also be required by the law to be stamped with the common seal of a company (since this can give people a confirmation of the fact that the entire company has recorded a certain document).

Although the way seals look has changed dramatically over the years (for instance, nowadays, red seals are used only when there is the need to avoid confusion in case of photocopying the documents) the way seals are used in different countries still remains different.

For example, in India, the law requires companies to use their company seal on share certificates and every use of this seal is registered by the company. In Japan, the usage of seals is also required, since it gives documents an official status. However, in Britain and even in Canada, company seals are not very used outside of very special situation that require a high level of formality.

In the United States of America, using seals is not mandatory and it has become more of a symbolic thing. Most of the states do recognize the power a seal has, but due to the technological improvements, there is no legal notice on whether a company should absolutely use a seal or not.

In China, to give another example, you should get a seal if you want to make sure no document will be sent back because it does not have one (most of the Chinese companies do not use handwritten signatures, therefore, they consider seals to be a must). This may also happen in other emerging countries (such as Russia, Romania, Serbia, Bulgaria and other countries from the so-called Russian Block).

The design of a company seal can vary a lot, from simple round-shaped seals including just the name of the company to seals that also include the company’s motto. Some stamps may also include the company’s account number or other pieces of information of this sort, but these stamps are not always considered to be actual “common seals”.

Although it may not be completely necessary from a legal point of view to have a common seal for your company, you should take it into consideration if you want to look very professional regardless of the country in which you do business.