When I form a corporation for a client, I purchase a customized corporate records book, which comes with share certificates and a corporate seal. This post explains what a corporate seal is and when it might be used.
A corporate seal is a hand-operated metal device that can emboss the corporation’s name and state and date of incorporation on a piece of paper. It, thus, can serve as evidence that the corporation acknowledges an agreement or other document as binding the corporation.
As an analogy, think of an English king, centuries ago, sealing a letter with molten wax and making an impression of his ring in the wax before it hardens. Whoever received the letter would know that it came from the king.
Nowadays, there is little need to use a corporate seal. I can think of only twice in the past decade that a client has used a seal: One time for a commercial loan document, the other for an office lease agreement. Indeed, in an era when original signatures rarely are exchanged (scan-plus-email being the norm), the thought of an original signature embossed with a corporate seal is rather quaint.
So, there probably is no need for the average corporation to go out of its way to buy a corporate seal. But if one comes along with your corporate, you might as well keep it, just in case.
Related post: Why Do We Need a Corporate Records Book?
Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.