About once a month someone asks us to provide them with a company seal or company stamp. Unfortunately we have to explain that, unlike some other company formation agents; we don’t provide company seals as part of our formation packages. Our reason for not offering them is quite simple. They have not been legally required by companies in the UK for over 20 years.
All UK limited companies used to be required to have a seal which had its company name “engraved in legible characters”. The use of this seal was required on all contracts, deeds and share certificates. Originally the seal would be pressed into melted wax but during the 19th Century rules were relaxed so that the seal could be placed directly onto paper.
The idea behind the seal was fairly simple. It was a clear indication of action on behalf of the company. The use of the company seal (and there often would only be one seal) meant that the company had come to a definite decision. For many years UK common law held that a seal was necessary for contracts to be valid.
These rules have now been done away with. Initially in the 1989 Companies Act and then in the 2006 Companies Act the use of a company seal was made optional. Section 45 of the 2006 Companies Act states that “a company may have a common seal, but need not have one”. Where a seal used to be required for contracts to be valid section 44 of the 2006 act states:
(1)Under the law of England and Wales or Northern Ireland a document is executed by a company—
(a)by the affixing of its common seal, or
(b)by signature in accordance with the following provisions.
(2)A document is validly executed by a company if it is signed on behalf of the company—
(a)by two authorised signatories, or
(b)by a director of the company in the presence of a witness who attests the signature.
So a seal is no longer required. You can make a document valid by having it signed instead. As this does not involve the heating up of blocks of wax signing is generally an easier option. If you want a bit of theatrical flair then you can still get a seal from lots of stationers but it is becoming increasingly unusual to see them used. Their use if likely to decline even further as online transactions become the norm. So that is why we don’t provide company seals. You don’t have to have one and very few people still use one.