What Is a Corporate Seal?

By Barry Solomon , last updated February 3, 2012

When you decide to incorporate a business by registering as a corporation in a certain state, you will receive a kit that includes all of the establishment documents as well as a corporate seal. This is a metal device that allows you to compress a legal document between two disks and will imprint the corporate seal. The seal contains information like the name and address of the corporation and the date of formation. The affixation of a seal to legal documents is a practice that goes back practically to the middle ages and even earlier. Seals were used by Jews, Persians, and later, the Romans as a way of marking a legal document in a time when illiteracy was rampant. A barrister would affix his seal by placing his ring into molten wax and letting it cool and dry on the document. As time went on, the seal acted as the official signature of the corporation. This was different from the signature of a director, officer, or authorized agent, since those signatures were subject to the rules and regulations of the shareholders agreement and any other official documents that promulgated any restrictions and limitations on signing authority. Thus a document with the corporate seal affixed to it was not subject to any restrictions in terms of the obligations that it created upon the company.

In modern times, the corporate seal has become an anachronism. Though it is still common practice to affix it to corporate deeds and to stockholder shares, the use of copiers, fax machines, and email attachments to convey binding corporate documents, a practice which has been endorsed by state law in all of the states, has rendered the seal obsolete. These state laws deem that the signature of an officer, director, or authorized agent is binding upon the corporation, and this applies to international commerce as well. However, seals are commonly used to authenticate birth and marriage records.

So, for the most part, you no longer need to have a corporate seal. But there may be some banks or government agencies that require it be affixed to certain documents, so it is a good idea to have one. In some states, the affixation of a corporate seal to a contract is deemed to be providing consideration, an essential element to making the contract enforceable, even though the Uniform Commercial Code has eliminated the seal as consideration in commercial seals. At one point the statute of limitations, the period during which legal action may be initiated, was deemed to be longer for an action brought on a contract under seal than for one not under seal.

The standard corporate seal is inexpensive, usually under $50. You can have a custom designed seal, which will cost more. So many companies like to have a seal to create a sense of authenticity to documents, especially when they are dealing with governments and other agencies. You can simply imprint the seal into the paper, or you can purchase gold leaf or wax or some other element, which will give the seal color and function as a corporate image builder.

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