Traditionally, company seals are used by companies to execute deeds. Instances, whereby a company seal may be used, are when purchasing a property or issuing a share certificate.
However, with effect from the 31st of March 2017, it is no longer necessary for a company to execute such documents with a company seal.
Section 41A of the Companies Act:
41A.—(1) A company may have a common seal but need not have one.
(2) Sections 41B and 41C apply whether a company has a common seal or not.
Thus it is the decision of the company whether to have a company seal
Section 41B of the Companies Act:
Execution of deeds by company
41B.—(1) A company may execute a document described or expressed as a deed without affixing a common seal onto the document by signature —
(a) on behalf of the company by a director of the company and a secretary of the company;
(b) on behalf of the company by at least 2 directors of the company; or
(c) on behalf of the company by a director of the company in the presence of a witness who attests the signature.
(2) A document mentioned in subsection (1) that is signed on behalf of the company in accordance with that subsection has the same effect as if the document were executed under the common seal of the company.
(3) Where a document is to be signed by a person on behalf of more than one company, the document is not considered to be signed by that person for the purposes of subsection (1) or (2) unless the person signs the document separately in each capacity.
(4) This section applies in the case of a document mentioned in subsection (1) that is executed by the company in the name or on behalf of another person, whether or not that person is also a company.
This means a director and a secretary, two directors or a director and a witness can execute a deed. The two signatures have the same effect as if the document were executed with the common seal.
Section 41C of the Companies Act:
Alternative to sealing
41C. Where any written law or rule of law requires any document to be under or executed under the common seal of a company, or provides for certain consequences if it is not, a document satisfies that written law or rule of law if the document is signed in the manner set out in section 41B(1)(a), (b) or (c) and (3).
This means that if there is any law that requires a document to be executed using the common seal, the methods of signing in Section 41B will be equivalent to a company using the common seal.
Thus, in a nutshell, there is no need for a company common seal. Companies can still choose to execute documents using the common seal of the company but such a document has the same level of authority as documents executed using methods laid out in section 41B. The model constitution still has provisions referring to the common seal. Section 41C of the Companies Act does state that the documents can be executed using the methods laid out in Section 41B. Companies can also choose to alter their constitution to remove such provisions.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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