Understanding a Common Seal
Summary: An official symbol of a company used while formalising paperwork and documents like contracts, share certificates, etc.
A common seal (also a company or corporate seal) is an official symbol used by a corporation. This seal, embossed with the entity’s title and number of registrations, is utilised while formalising paperwork like contracts, deeds, and share certificates.
Update on Common Seal Requirement in Singapore
In Singapore, things have changed regarding the necessity of a common seal. Since 31 March 2017, as per Sections 41A, 41B, and 41C of the Companies Act (Cap. 50), the use of a common seal is no longer compulsory for companies and Limited Liability Partnerships (LLPs) when they put their signature on legal papers.
Section 41A (1) clarifies that a company may possess a common seal, though it’s not obligatory.
Section 41B (1) explains that a company has the authority to authenticate a document conceived or specified as a deed without the need to stamp a common seal if signed by:
(a) a director and a secretary of the company,
(b) at least two directors of the company or
(c) a company director in the company of a witness who vouches for the signature.
Section 41C presents the alternative to using a seal in situations where any written law or rule mandates that any document should bear the common seal of a company or indicates potential consequences if it doesn’t, such a law or rule is respected as long as the document carries a signature.
Despite these revisions, certain companies still retain a common seal for use in international dealings. When not in use, the seal is stored at the company’s official address.
Signature as an Alternative to Seal
Legal documents don’t necessarily need a common seal; signatures from authorised individuals may suffice.
In the case of companies, legal papers can be authorised by:
- a company director and the secretary,
- two company directors or
- a company director under the watch of a witness who can confirm the signature.
For LLPs, these documents can be legitimated by:
- two partners from the LLP, or
- one partner accompanied by a witness who can verify the signature.
