Are Corporate Seal and Official Stock Certificates Required?


Do you know whether your business is required
to have a corporate seal and official stock certificates? These items were once required
items for corporations. Now, even though they are no longer required, they can still be
extremely useful. Most states still recognize the legal power of a corporate seal and official
stock certificates. The corporate seal, like a state seal, was
once the official mark of a corporation. Corporate Seals are official identifying marks that
are imprinted into clay, wax, metal or paper. Today’s more modern Corporate Seals emboss
the corporation’s official name, state and year of its formation onto legal documents
which represent the power and authority to authenticate them. As a corporation is considered
a separate entity, its own person, and the seal acted as its signature.
This was because an individual could not authorize certain corporate acts, and the corporate
seal proved corporate authority. In the digital age, though, technology has made the corporate
seal obsolete. You might sometimes still see a corporate seal used for deeds or bank accounts,
but even these are rare. Today, state laws recognize the signature of an individual with
corporate authority, such as the CEO or director, as binding upon the corporation.
Originally, official stock certificates served as title to a corporation’s stock and were
issued to all stock holders. These certificates showed proof of ownership of corporate shares.
Although electronic filing has now become popular, providing an alternative from the
official hard copies, many corporations still issue official stock certificates as they
provide a sense of authenticity and authority to the corporation.

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