A corporate seal, also known as a company seal, is an official tool used by companies to stamp or emboss important documents, signifying approval and certification by the Board of Directors. It includes the company’s name, year of establishment, and the state of incorporation, serving as the company’s official signature.
Key Uses of a Corporate Seal
A corporate seal may be applied to various documents, including:
•Loan documents
•Leases
•Sale agreements
•Minutes from Board of Directors meetings
•Employment and vendor contracts
•Other official company commitments
Corporations can use the seal to affix, impress, or reproduce on documents as needed. Typically, the corporate seal is adopted during the organizational meeting, which is usually conducted soon after the company’s formation.
Once this meeting is completed and all necessary documents are signed, sealed, and recorded in the minutes book, the company or LLC is authorized to begin regular business operations.
Importance of Issuing Shares and Membership Certificates
Issuing shares (for corporations) or membership certificates (for LLCs) is a crucial part of the organizational meeting. The corporate seal is often used to stamp stock or membership certificates alongside the president’s signature.
Financial institutions such as banks may sometimes request a corporate seal for verification purposes. Ensuring that stock certificates are properly stamped and signed by the president helps prevent fraudulent claims of ownership through fake certificates.
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