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Query : Common seal

Indranil Dutta (CS Student) (83 Points)

26 February 2011

Is it mandatory for the common seal to be affixed on all documents of the company ??Pls.help..

-Indranil

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11 Replies

Jaideep (Service) (1368 Points)
Replied 28 February 2011

Hi,

No it is not mandatory to affix common seal on all the official docs of Company. It is required wherever Company is required to sign...and thus normally on all agreements / contracts, MOU etc. Common Seal is signature of Company.

Kindly refer Section 48 and 54

Regards

Jaideep Pandya

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Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 28 February 2011

It is not mandatory to affix common seal on all documents of the Company.

As per Section 48, the deeds can be executed by the Company through its authorised representative under its common seal. The affixing of common seal needs to be under the authority of the Board.

As per Section 54, a document or proceeding requiring authentication by a company may be signed by a director, the manager, the secretary or other authorised officer of the Company and need not be under its common seal.

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 28 February 2011

Yes, it is not necessary that the common seal of the company to be affixed on all documents of the Company.

But where ever it is to be affixed, it is required to follow specified procedure and properly record it.

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Indranil Dutta (CS Student) (83 Points)
Replied 28 February 2011

Thank U all for ur help..

-Indranil.

cs ashwini kumar (Company Secretary in Practice) (173 Points)
Replied 01 March 2011

Dear Professionals !

The requirement for a company to possess a common seal is statutory (under Section 34 of the Companies Act, 1956 (“Act”)).

The common seal can only be affixed to an instrument pursuant to a board resolution. Further the use of common seal may be pursuant to regulations in the AOA of the Company which may be like: “common seal can be affixed to an instrument only pursuant to a board resolution, in the presence of atleast one director or such other person authorised through a board resolution to use such common seal. Such director or other authorised person is required to sign every instrument to which the seal of the Company is affixed in their presence”.

Further, under the Indian Companies Act, 1956, the following documents are statutorily required to be affixed with a common seal:

(a) A company may by writing under it’s common seal empower a person to execute deeds on it’s behalf in or outside India (Section 48 of the Act)

(b) A company having an official seal for use in any territory, may by writing under it’s common seal authorise any person appointed for such purpose in such territory to affix the official seal to any document to which the company is a party in such territory (Section 52 of the Act);

(d) Instrument appointing a proxy should be signed by the appointer (or his attorney duly authorised in writing if the appointer is a body corporate), should be under a common seal or be signed by an officer or attorney authorised through the company’s common seal (Section 176 of the Act).

The common seal can be affixed to any part of a share certificate. However, for other documents, the common seal should be affixed either below the signatures or any where on that page as long as the signature of the persons in whose presence it was affixed is on the same page as the common seal.

Best Regards

CS Ashwini Kumar

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uma shankar (Company Secretary) (25 Points)
Replied 23 September 2011

Some Bank insist that the common seal should be affied on certified copies of resolutions, in addition to the signature of the Director or Secretary. They also insist that the certification of a resolution by the Company secretary is not enough, and that both the Secretary and Director have to certify the resolutions "as per their internal guidelines". Do we have to accept such unreasonable demands ?

Uma Shankar

Jaideep Singh Khattar (Article Clerk) (25 Points)
Replied 05 July 2012

I have read the above and this is what i understand, please correct me if i am wrong:

So for the succesful use of the CS, one would need 2 things,

one is that the Affixing of the CS has to be witnessed by the director and secretary of the company and since they have witnessed the same, they also have to affix their signatures thereto stating that they have succesfully witnessed the affixing of the CS.

Secondly, for the affixing of the CS, a board resolution of the company would be required inorder to authorize as to which documents are there to which a CS has to be applied?

Is my understanding correct?

Also, i have one related query, if the director and the secretary have to witness the affixing of the CS and have to sign as witnesses then why is it, that many times in company documents like say for eg a leave and license agreement that the company enters into, you do not see 3 signatures on the last page of the agreement, but you will only see the signature of one person alongwith CS and an accompanying board resolution? Let me know.

Thanks and Regards,

Jaideep

S Krishnaswamy (.) (21 Points)
Replied 06 July 2012

I would like to know whether it is necessary to affix common seal on the board resolution of the company to open a bank account (current/term deposit) ?