Posted in Corporate Law
✅A corporate seal is used to stamp or emboss important business documents to show that it is authorized and approved by the board of directors of the company.
Do you need one for your company?
✅ In California the answer is no. The use of a corporate seal is permissible, but it is not required.
- California Corporations Code section 207(a) – it authorizes a corporation to adopt, use and alter a corporate seal at will, but FAILURE TO AFFIX A SEAL on a document DOES NOT AFFECT the document’s VALIDITY.
- California Civil Procedure Code section 1932 – states that there is NO DIFFERENCE between a sealed and unsealed writing.
- California Civil Code section 1629 – All distinctions between sealed and unsealed instruments are ABOLISHED.
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California Corporate Seal FAQs
Corporate seals may seem like a relic of the past, but they still hold significance for some businesses today—so let’s explore whether your company needs one.
What Is A Corporate Seal?
A corporate seal is a physical stamp or embosser used to mark significant business documents, such as contracts, resolutions, and deeds, to signify they have been authorized and approved by the company’s board of directors. Traditionally, the seal acted as a formal symbol of authenticity, providing assurance to all parties involved that the document was genuine and binding. While modern laws often render the seal unnecessary for legal validity, its use can still enhance the formality and professionalism of critical agreements. In some contexts, particularly with international transactions or certain industries, the presence of a corporate seal may carry symbolic weight and foster trust among stakeholders.
Is A Corporate Seal Required In California?
In California, the decision to use a corporate seal is entirely optional, as it is not a legal requirement for businesses. According to California Corporations Code section 207(a), corporations have the flexibility to adopt, use, and even alter a corporate seal as they see fit. However, the absence of a corporate seal has no impact on the validity or enforceability of business documents, as clarified by the law. This means that even without a seal, contracts, resolutions, and other official records remain legally binding and fully recognized. The choice to use a corporate seal often depends on a company’s preferences, industry norms, or the desire to add an extra layer of formality to important agreements, rather than any legal obligation.
Does Failing To Use A Corporate Seal Affect Document Validity?
A common question is whether the absence of a seal could undermine a document’s validity. Under California law, the answer is no. Both California Civil Procedure Code section 1932 and Civil Code section 1629 affirm there is no distinction between sealed and unsealed writings. This ensures that your business agreements are binding, whether or not a seal is applied.
Why Would A Business Choose To Use A Corporate Seal?
Although corporate seals are not legally required, many companies still choose to use them to convey an additional level of professionalism and formality. A seal can create a sense of authenticity and prestige, particularly when affixed to key documents like contracts, certificates, or resolutions. This can be especially beneficial in industries or jurisdictions where seals are historically significant or culturally valued, as their presence may reassure clients, partners, or other stakeholders of the document’s legitimacy. Additionally, using a corporate seal can help differentiate official company documents from routine paperwork, reducing confusion and emphasizing their importance. Ultimately, whether to use a corporate seal is a strategic decision that aligns with your business’s image, operational practices, and goals.
How Can Focus Law LA Help With Corporate Matters?
At Focus Law LA, we’re passionate about empowering business owners and entrepreneurs to thrive. We go beyond simply answering questions. Our mission is to help you avoid unnecessary risks, so you can focus your time and energy on achieving your goals.
Whether you’re wondering about corporate seals or looking for comprehensive legal solutions, we’ve developed innovative tools like our Preventative Legal and Outsource General Counsel programs. These services provide clarity and peace of mind, so you can make informed decisions without distractions.
