Ever saw an episode of Merlin?
You would have noticed the official seal being waxed onto a letter, that usually spelt doom:)
Traditionally, a seal included a piece of wax, a wafer, or some other substance joined to the document or an impression made on the document by mechanical means.
A company seal is also referred to as a corporate seal or a common seal.
Basically, it is an official seal used by a company to execute documents. The company seal has the company name and CAC registration number.
Use of the company seal
Although the company seal for executing documents, it’s use should be restricted to the minimum and only very serious transactions or documents
For instance, it is not necessary to use the company seal for all businesses, such as approving minutes of meetings, simple vendor agreements, service level agreements etc.
Some common uses of company seals include:
- Company resolutions
- Important Contracts and Deeds
- Property transfer (landed in most cases) and execution of land contracts.
- Execution of loan documents, mortgages, and guarantees.
- Occasions where a document will be utilized out the country.
Before the company seal is used, it must be either be authorized in the company’s articles of association or by a resolution of the board.
What really is the power of the seal
Although the power of the seal has been watered down by the use of signatures, corporate seal still remains the official mark of companies.
A company is considered a separate entity, as such the seal acted as the signature of the company. Legal or official documents that emanated from a company require a company seal. No individual could authorize certain corporate acts without the company seal appended on the document authorizing such acts.
However, in recent times the seal’s importance has been reduced and has been limited to very few instances. For instance, the company seal is required for board resolution. Without the company seal, a board resolution is invalid.
In place of seals, laws are beginning to recognize the signature of individuals who have actual authority such as the directors or company-authorized signatories as binding upon the corporation.
Every company must have a company seal as there are certain documents and agreements that will not be considered valid and binding except the company seal is appended here.
If you do not have a company seal and you need one, here’s where you can get it.