S43(1)(a) of the Companies Act 2006 states that:
(1)Under the law of England and Wales or Northern Ireland a contract may be made— (a)by a company, by writing under its common seal
What is meant here by "writing under its common seal"?
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2 Answers
The phrase means its literal meaning. A written contract is made by a company if the document is affixed with its common seal (an imprinted stamp, not the animal).
A common seal, or a company seal, was the concretization of the corporation as a legal person. A validly sealed document is equivalent to a document "personally" signed by the corporation.
Originally under common law, the company seal was required whenever a person's signature would have been required for a natural person. It remains mandatory under certain circumstances in several jurisdictions and in others still fairly common and is prima facie evidence of a company's assent to a document.
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But how is its literal meaning to be construed? I mean, should one's name be signed in pen on the page underneath the position of the common seal? Or should the entire text of the contract be printed underneath the common seal which might be at the top of the page? Or is it just to say that the whole contract ought to be in written form, executed by the company with/"under" its common seal? Dec 18, 2022 at 16:56
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@seekinganswers not sure if I understood your question. You put the stamp where you would put the signature for a person. To prevent modification, you may also emboss all pages of the document, just like personal signatures and initials. If you are asking if under refers to the position of the seal on a document, then no. The under means the physical position of the seal over the page.– xngtngDec 18, 2022 at 18:27
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So what is it that is to be written then (under the common seal)? Dec 18, 2022 at 19:17
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@seekinganswers the document. Under the common seal means affixed or stamped with the common seal. By writing means in writing. They are separate.– xngtngDec 18, 2022 at 20:54
That's a Common Seal - specifically, it's a common seal for the Australian company Common Seal Sample 2 Pty Ltd with the unlikely Australian Company Number 123 456 789.
It's a seal in the sense of a wax seal although modern seals are usually rubber ink stamps rather than wax seals.
They are a way for corporations to formally endorse documents, in this particular case, a contract would be formed when the director or secretary affixes the seal to the document.
Of course, the overwhelming majority of contracts with companies are made under limb b) of this section:
(b) on behalf of a company, by a person acting under its authority, express or implied.
Documents under seal are generally only used for really important contracts like bank loans or real property transactions.
