Company common seals and company stamps are common items which companies may use on documents. There is a difference between the two and companies can decide whether to have them or not.
Company common seal
A company common seal is an official seal used by the company to endorse documents like share certificates, deeds and contracts which may require the company common seal to be affixed. It usually contains the company name and registration number. It is a metal instrument that is used to emboss documents.
A company common seal is used for certain contracts or deeds as required by law. For example, a share certificate will require the company common seal to be embossed on it. However, with effect from 31st March 2017, there were amendments to the Companies Act.
Section 41A of the Companies Act reads:
41A.—(1) A company may have a common seal but need not have one.
(2) Sections 41B and 41C apply whether a company has a common seal or not.
Section 41B and Section 41C of the Companies Act reads:
Execution of deeds by company
41B.—(1) A company may execute a document described or expressed as a deed without affixing a common seal onto the document by signature —
(a) on behalf of the company by a director of the company and a secretary of the company;
(b) on behalf of the company by at least 2 directors of the company; or
(c) on behalf of the company by a director of the company in the presence of a witness who attests the signature.
(2) A document mentioned in subsection (1) that is signed on behalf of the company in accordance with that subsection has the same effect as if the document were executed under the common seal of the company.
(3) Where a document is to be signed by a person on behalf of more than one company, the document is not considered to be signed by that person for the purposes of subsection (1) or (2) unless the person signs the document separately in each capacity.
(4) This section applies in the case of a document mentioned in subsection (1) that is executed by the company in the name or on behalf of another person, whether or not that person is also a company.
Alternative to sealing
41C. Where any written law or rule of law requires any document to be under or executed under the common seal of a company, or provides for certain consequences if it is not, a document satisfies that written law or rule of law if the document is signed in the manner set out in section 41B(1)(a), (b) or (c) and (3).
This means that the Companies Act now explicitly states that a company does not have to have a company common seal and a company can execute a deed by signature by having one of the following individual sign on the document.
- on behalf of the company by a director of the company and a secretary of the company;
- on behalf of the company by at least 2 directors of the company; or
- on behalf of the company by a director of the company in the presence of a witness who attests the signature.
A document signed in these manners will be equivalent to the company common seal being affixed on the document. Thus there is no need for a Singapore company to have a company common seal. There is also no need to alter the company’s constitution as the amendment was made to the Companies Act which governs all Singapore companies.
According to section 144(1A) of the Companies Act, it reads:
(1A) 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.
This means that the company’s registration number or unique entity number (UEN) must be on all generally all documents issued by the company. For documents that have the company’s name and registration number shown, like a document from the company printed on the company letterhead, then the company stamp is not needed. The company stamp is more of a form of convenience rather than a necessity. However, because it is relatively cheap to have a company stamp made, we usually recommend that clients get their company stamp done and the stamp is usually kept with one of the directors of the company. The company stamp, like the company common seal, is not a mandatory requirement.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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