Understanding Common Seal

A common seal, also known as a company or corporate seal, is a company’s official emblem. It traditionally features the company’s name and registration details and is used to validate important documents such as contracts, share certificates, and deeds.

In Malaysia, the use of a common seal is still recognized under the Companies Act 2016, though it is no longer mandatory in many cases. Section 66 of the Act allows companies to execute documents without a common seal by having them signed by authorized officers. This can include signatures from two directors, a director and the company secretary, or a director in the presence of a witness who attests the signature.

While the law permits these alternatives, some companies still choose to maintain a common seal, especially for transactions involving international partners or when dealing with foreign jurisdictions that require its use. For businesses that retain a common seal, it is generally stored securely at the company’s registered office or other designated location.

The move toward greater flexibility in document execution aligns with the evolving needs of Malaysian businesses. It emphasizes efficiency and practicality without compromising the validity of legal documentation. Understanding the role of the common seal and its modern alternatives is crucial for companies navigating the regulatory framework in Malaysia.