Business

About Common Seal You Must Understand

What is a common seal?

A common / company seal is an item or tool that is usually owned by a company that is an official mark of the corporation. In order for companies to obtain a common seal, they must first register the company legally and apply for the approval for a common seal. Because it is an official signature of the company, it is not something to be taken lightly of. A company seal must be kept safe in order to avoid misuse by irresponsible people that will put the company in a disadvantage.

What is a common seal for?

Originally, a common seal is very important as it is mandatory for the purpose of document authorization. These documents can only be executed if there is a company seal’s mark on it. However, that was in the past. Recently, several countries’ laws no longer state that a common seal is obligatory. Instead, the process of authorizing a document can be done with the signature of the company’s president or CEO in the presence of a witness who can attest to the signature.

So, is a common seal still needed?

Although now companies have the option not to have a common seal, it is still sometimes used in several occasion, especially financial related matters. For example, a common seal might be needed for the process of opening a bank account for the common or other smaller corporate accounts.

More about common seal

Although its importance has now lessened, the use of a common seal can not be taken lightly. It must always be supervised by the company’s CEO or president. Every use of the company seal must be done after an approval and each deed done must be kept track of in the Articles of Association. A company seal’s use must also be done along with the president or CEO’s signature. Thus, it can’t authorize a document on its own without the signature.

Although a company seal is no longer very much needed, it is still beneficial in several ways. Many companies still choose to make their own common seal in case it is needed in the future. A company seal can strengthen the signature on documents that are authorized so that it can be ensured of its authenticity more. By using a company seal on a document, you will also appear more proper and professional. Maintaining a professional image is very important in the world of business. If you can appear credible, people will be surer of partnering up with your company in the long years.

More, in several other countries, a common seal is still deemed very important for business. These countries require companies that wish to work with them to provide their company seal for authorizing documents purposes so that they can be regarded as legal. In such cases, a company that has no company seal must be able to provide it. If not, they are going to miss on the chance of doing business with prospective companies.

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