A company seal is essentially a rubber stamp with the company’s name and Australian Company Number or ACN. It is the same thing as a common seal or a corporate seal.
Prior to 1988, company seals were mandatory for the execution of documents and it was compulsory that a seal was affixed to deeds. The Company Law Review Act 1988 abolished both requirements.
Although company seals are no longer a legal necessity, constitutions of companies established prior to 1988 may still require their use. Unless a constitution predating 1988 has been updated, the company must still follow the rules set out at the time of its registration. In addition to a company constitution review to ensure there is no written mandate in the case that a company decides against the use of a seal, it is imperative to place references to the manner in which the company will execute its documents.
Regardless of the law, many companies today still choose to use a company seal. For instance, a company seal may give more legitimacy to documents for people unfamiliar with the Australian way of document execution. If a company has many overseas clients, this may be a way to show legality and validity.
If a company chooses to use a seal, in order for it to be valid it must include:
- for a company that has its Australian Company Number (ACN) as its name – the company’s ACN; or
- the company’s name, the expression ‘Australian Company Number’ and the company’s ACN; or
- if the last 9 digits of the company’s ABN are the same, and in the same order, as the last 9 digits of its ACN – the expression “Australian Business Number” and the company’s ABN.
ACN or A.C.N. are both acceptable abbreviations for Australian Company Number.
A company may also have a duplicate common seal if it so wishes. The duplicate common seal must be a copy of the common seal with the words ‘duplicate seal’, ‘share seal’ or ‘certificate seal’ added.
It’s important to know that using an invalid seal to execute a document is a liability offence and under the Corporations Act can carry a penalty of $1000.
When choosing the physical stamp there are many options. There are hand seals and fold seals for example and they come in various sizes.
Some company registration agents provide an option to purchase a seal with the registration to save the customer hassle.
You can order a Company Seal through us. It is usually made and express posted to you the next day.