Summary
- A company seal is a historic form of authentication used to confirm that an authorised person has signed a document on behalf of a company, but since 1989 the Companies Act removed the legal requirement to affix a seal to deeds and contracts in England and Wales.
- Whether your company must use a seal depends on its articles of association, and any document signed in a manner that contravenes those articles may not be valid or enforceable.
- In place of a company seal, documents can be validly executed by two directors, a director and company secretary, a power of attorney, or through an electronic signing platform.
- This article explains when and whether a company seal is required for business owners operating in England and Wales.
- LegalVision, a commercial law firm specialising in advising clients on corporate governance and commercial document execution, outlines how company seals work and the alternatives available.
Tips for Businesses
Check your articles of association before executing any deed or contract to confirm whether a company seal is required. If your company no longer uses a seal, ensure documents are executed by two directors or a director and company secretary. Consider granting a power of attorney where a specific individual regularly signs on the company’s behalf.
A company seal is a physical stamp or mark that a company affixes to deeds, contracts, and other formal documents to authenticate that an authorised person has signed on the company’s behalf. Once a legal requirement, its use is now largely optional under English and Welsh law. This article will explain what a company seal is, when they are used and whether your company needs one.
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What is a Company Seal?
Historically, there was a legal requirement for companies to use a seal on important documents, including:
- deeds;
- agreements; or
- share certificates.
The effect of this seal makes documents legally valid.
Today, they mostly indicate that a person has the authority to sign a contractual document on behalf of a public company.
Additionally, affixing a seal to a document can occur in several ways. For example, parties can:
- imprint melted wax onto a signature page;
- affix stickered company seals onto that page;
- use an ink stamp; or
- emboss imprints onto the page.
While many companies do not still use a seal, those that do must ensure they engrave their seals in legible characters. Likewise, they must imprint those characters clearly onto a signing page.
How Do I Sign A Document With a Company Seal?
Using a seal can prove the validity of your signature to sign on behalf of that company. However, to execute a deed or commercial contract properly, you will also need to have the document witnessed by either:
- two directors of the company; or
- one director and one company secretary.
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Do I Need to Use a Company Seal?
You may be unsure whether your company should be using a seal when signing commercial documents. In that case, you should check your business’ articles of association. Note if the document mandates the use of a company seal.
Your articles of association are your company’s constitutional documents that outline the key terms and rules governing the operation of your company. In addition, they will outline your company’s ability to create general powers of attorney. Like a company seal, powers of attorney give company members the authority to execute legal documents on behalf of your business.
Today, deeds, contracts and other important documents no longer require a company seal affixed to them. An exception is if your company was founded before 1989 and still uses a seal.
For that reason, you may not need to execute a document on behalf of your company using a company seal.
Essentially, it is vital to check your company’s constitutional documents before you sign a deed on behalf of your company. Suppose you sign a deed in a manner that contravenes the execution parameters set out in your articles of association. For example, you sign a document without a legitimate power of attorney. In that case, that document may not become valid or enforceable.
How Can I Execute A Document Without A Company Seal?
Instead, most companies can now give authority to their signatories to sign a legal document through a power of attorney.
Powers of attorney are legal arrangements that bestow special powers on one party to act or make decisions on behalf of another party or a business in general. Powers of attorney mostly convey authority to sign contracts on behalf of a company.
Under the Companies Act, a limited company may also validly sign a document if:
- a director and a company secretary sign a document;
- two directors sign a document; or
- documents are executed electronically through an online signing platform.
Key Takeaways
Company seals are most commonly used by business owners looking to execute documents on behalf of the corporation they are operating. They provide a form of authority. It shows that the person signing on behalf of the company has the legal authority to do so.
Under English and Welsh law, corporations are no longer required to affix a company seal when signing documents. While many still use seals, others opt instead to use powers of attorney to give parties authority to sign legal documents. Under the Companies Act, parties can also legally sign documents using two directors or a director and a company secretary.
It is advisable to get a lawyer’s advice if you are unsure how your company should execute commercial contracts.
If you need advice on whether you should be signing with a company seal or not, LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced contract lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
You should use company seals if your company’s articles of association mandate its use to validate your signature on a deed.
The Companies Act confirms that it is not a legal requirement for a company to sign a document and affix a stamp or seal to that document.
A company can validly execute documents without a seal by having two directors sign, or a director and company secretary sign together. Documents can also be executed electronically through an online signing platform, or authority can be granted through a power of attorney.
A document may not be enforceable if the seal is not imprinted legibly or correctly. If your company still uses a seal, you must ensure it is engraved in legible characters and clearly imprinted onto the signing page to avoid any enforceability issues.
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