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About common seal

Surendra (CA) (133 Points)

30 December 2007

common seal

Is it compulsory that common seal should be made by metal and company name should be engraved on it?

Is common seal is compulsory on share certificates and Memorandum and articles.

Please clarify.

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17 Replies

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 30 December 2007

COMMON SEAL* 287.1 Background note A company is an artificial person with perpetual entity and common seal. The common seal is equivalent to a signature and any deeds executed or agreements entered into by a company must be under the common seal of the Company. The share or debenture or deposit certificates are also issued under the common seal of the company. This has no application to dematerialised securities. In Pancharan Dhara v. Monmatha Nath Maity [2006] 69 SCL 401, the Supreme Court has observed that so far as the question of putting up of the seal of the company was concerned, it is a relic of the days when mediaeval barons, who could not read or write, used their rings to make a characteristic impress. Even in absence of a seal, the company may still be held to be liable having regard to the nature of transaction and the authority of those who had executed it. If the act of the directors is not ultra vires or no public policy is involved, the parties acting thereupon cannot be left at large. 287.2 Adoption of common seal At the first Board Meeting of the Company, the common seal of the company is adopted by means of a resolution. (Annex 287.1) 287.3 Safe custody The common seal of the company must be under the safe custody of authorised director/officer. 287.4 Authorisation to affix common seal A Board Resolution (Annex 287.2) should be passed for affixing the common seal in any instrument. A committee of directors may also authorise the affixing C H A P T E R of common seal. The resolution must also authorise at least two directors and the secretary or other persons who shall sign the instrument in token of their presence. 287.5 Affixing of common seal The authorised person shall sign and affix the common seal on the document/ share certificate(s) in the presence of the authorised directors/secretary. 287.6 Entry in Common Seal Register Particulars of common seal affixed must be entered in the Common Seal Register.

(Guest)

Sir, I am in the business of engraving common seal. I would like to know where do I get the Common Seal Machine Small Size.

Please guide me

Lineesh James (Company Secretary) (30 Points)
Replied 17 September 2008

Originally posted by :Surendra

It is not compulsory that common seal should be of metal but the company name should be engraved on it.

The common seal is compulsory on share certificates as per the 'issue of shre certificates rules' or under section 48 if you want to appoint a power of attorney for executing Deeds on Company's behalf.

The Act doesnot say that it is compulsory for a Company to have a Common Seal.If you are a company without share capital or with shares in electronic form then you can survive without a Common Seal.

If you have a seal, it will be considered as the signature of the Company and all deeds executed under the Common seal shall be considered as if it is signed by the Company.

Any contract signed by a director/ person acting under authority of a proper resolution shall be binding on the Company even if the Common Seal is not affixed.

(Guest)

If common seal is not affixed in various documents executed by the company such as DP Note, Loan Agreement etc with any bank or financial institution at the time of availing loan by the company, does it mean that documents exected are invalid documents, in the eyes of law.

What are the documents which are executed/ssued by the company, where common seal must be affixed.

GK RAJ (Director) (24 Points)
Replied 22 September 2010

Originally posted by : Guest
	Sir, I am in the business of engraving common seal. I would like to know where do I get the Common Seal Machine Small Size. Please guide me

www.commonseals.com

email : commonseal @ gmail.com

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 22 September 2010

Originally posted by : Lineesh James
	Originally posted by :Surendra " It is not compulsory that common seal should be of metal but the company name should be engraved on it. The common seal is compulsory on share certificates as per the 'issue of shre certificates rules' or under section 48 if you want to appoint a power of attorney for executing Deeds on Company's behalf. The Act doesnot say that it is compulsory for a Company to have a Common Seal.If you are a company without share capital or with shares in electronic form then you can survive without a Common Seal. If you have a seal, it will be considered as the signature of the Company and all deeds executed under the Common seal shall be considered as if it is signed by the Company. Any contract signed by a director/ person acting under authority of a proper resolution shall be binding on the Company even if the Common Seal is not affixed. "

Mr. James i do agree with the above except those orange lines.

Every company must have its common seal. It is one of the basic Characteristics of the Company. Articles should also contain the provisions regarding the common seal.

Neha Gupta (PCS) (377 Points)
Replied 22 September 2010

I am agreed with Ankur Sir, it is mandetory that Company should have a Commom seal of its own.

Ajay Mishra (Company Secretary) (74332 Points)
Replied 22 September 2010

Dear Friend,

The Companies Act, 1956 is silent on whether the common seal should be metal or any other material. It says that the company shall have common seal in safe custody of the Board and should be affixed on any instrument as per Regulation 84 of Schedule I of the said Act.

Regards

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 22 September 2010

Absolutely right.

GK RAJ (Director) (24 Points)
Replied 22 January 2012

Secretarial Standard of Company Common Seal

FORM AND CONTENT

2.1 The common seal should be made of metal and capable of being manually operated.

2.2 The common seal should have the name of the company and state in which the registered office is situated should engraved in legible characters.

www.commonseal.co.in

GK RAJ (Director) (24 Points)
Replied 22 January 2012

How to Obtain Common Seal?

email the scanned copy of incorporation certificate.

We send proof draft of the common seal in JPEG format for approval.
After approval Engraving will done and dispatched through courier.
www.commonseal.co.in

Mady (Assistant Managar) (28 Points)
Replied 27 March 2012

Is it mandatory to have a COMMON SEAL for all the companies? We have a customer who doesn't have common seal but our statutory auditors are raising queries like common seal is mandatory to affix on common seal where ever the format called for the same even though board resolution is silent about the common seal clause.

Pls someone one kindly clarify.