Company Stamp and Company Seal: What are They? Do You Need Them?Download Now: FREE GST 2023 GuidebookDownload Now: FREE Employment Pass ChecklistDownload Now: Free Incorporation Checklist
Whatever your business model, one thing holds true for every company and corporation there will be a lot of documentation to be processed. From holiday cards sent to clients to invoices and share certificates, a lot of paper is going to cross the desks of your company’s office manager and legal counsel. Company stamps and company seals are important tools to help them properly process each of those documents.
Deciding whether your company needs a company stamp, or a company seal seems like it should be a straightforward process, but because each country has different rules and regulations, figuring what your needs are can be tricky. Here’s why:
1. Some countries use “company stamp” and “company seal” interchangeably to refer to a single tool. For example, in Singapore, the company seal is also sometimes called the company’s stamp.
2. Some countries refer to each of these tools differently. For example: in country A, a tool might be called a seal. In country B, that exact same tool might be called a stamp.
3. Each country has different legal requirements for how documentation is to be handled.
Most of the time, however the following definitions will be sufficient when deciding which tool(s) you require.
Seals: A History
Before we get into the details, however, let’s make sure everybody understands the history behind company seals. Typically, the “seal” was a blob of wax that was used to hold scrolls of paper (and, later, envelopes) closed so that what was written could be kept confidential during transit.
A rendering of a family’s coat of arms or other official symbol would be pressed into the blob of wax. This both helped the wax stay in place and told the recipient who the document was from. The combination of wax and the image pressed into it was known as a “seal.”
If the document arrived with the seal still intact, the recipient could trust that it held whatever the sender intended. If the seal had been broken, however, the recipient knew that there was a chance the document had been tampered with.
Today, a “common seal” serves a similar function—it lets recipients know that the document is legitimate and that its contents are legally endorsed by the company and, therefore, are binding. There are two parts of a company seal: the visual seal and the physical seal.
The common seal is a metal casting used to emboss a document. That embossment is what conveys legal validity to the recipient.It is also important to know that these common seals are not widely available. Some countries restrict the manufacturing of common seals to only approved vendors. If you need one for your company, make sure you purchase it from a government-approved source.
A company stamp is typically what it sounds like: a reusable ink stamp that is used to reduce the amount of writing an individual must do. The company stamp is often for convenience rather than a legal requirement. A CEO, for example, might create a rubber ink stamp of their signature so that they do not have to actually sign each piece of paper that crosses their desk. This is incredibly useful for documents like direct mail pieces. A company stamp can also be created to state legally important information like the company’s name, address, unique entity number, etc. These stamps can be used on some legal documents, like the invoices sent to clients.
In Singapore, businesses use both a “common seal” and a “company stamp.”
Prior to 2017, the common seal is an embossing seal that is fixed to official documents like share certificates, various deeds, and any official contracts that are legally required to bear the company’s seal. After 2017, there were changes made to Section 41 of the Companies Act, which says that the common seal is no longer a legal requirement but still may be used.
The company stamp, on the other hand is an ink stamp that must meet specific requirements, and is used on most of the documents the company issues, like invoices, business letters, statements of account, etc.
You can read more about Singapore’s rules regarding company seals and company stamps at this link.
What Does Your Company Need?
This is going to depend both on the type of document you are sending and the legal requirements of the country where you are doing business. Although a common seal is no longer a legal requirement in Singapore and the directors signature are sufficient as proof, there are times where your company enters contract under foreign laws which may require a common seal. The company stamp provides convenience to your daily operations if you need to provide the company details on documents.
Under section 144(1A) of the CA, the registration number of a company shall appear in a legible form on all business letters, statements of account, invoices, official notices and publications of or purporting to be issued or signed by or on behalf of the company. Thus, the stamp may be used on these documents.
An existing company incorporated before 31 Mar 2017 may choose to remove the provisions of the common seal from the company’s constitution by amending its constitution. This process can be executed through lawyers and the company’s secretary may prepare the relevant documents and lodge the necessary on ACRA for the change in constitution.
For companies who are still using the common seal, the company’s secretary may safekeep the common seal to ensure the proper use of the seal. As for the company stamp, the company may leave the company stamp with a representative who has the authority to process company documents.