Common Seals Explained: Legal Requirements For Australian Companies

If you’ve recently set up a company in Australia, you may have come across the term “common seal” and wondered whether you still need one in 2025.

The short answer: most Australian companies don’t legally need a common seal anymore. Modern rules under the Corporations Act 2001 (Cth) let companies execute documents without a seal, including deeds.

That said, there are still times when keeping a seal is practical - and occasionally your own constitution or a counterparty may expect you to use one.

In this guide, we’ll cover what a common seal is, when it’s optional vs useful, how to validly sign documents without a seal, and the best-practice steps if you decide to keep and use one.

What Is A Common Seal - And Do Companies Still Need One?

A common seal is a physical stamp used to “seal” documents on behalf of a company. Historically, affixing the seal was how a company formally approved important documents (especially deeds). A typical seal shows the company’s full name and Australian Company Number (ACN).

Under Australian law today, companies are not required to have or use a common seal. Most businesses now execute documents without a seal by following the signing method in section 127 of the Corporations Act.

Even so, some companies keep a seal because it can smooth specific transactions - for example, older property forms, certain foreign registries, or where a bank or overseas counterparty is more comfortable seeing a seal panel on a deed.

How Do Companies Execute Documents Without A Seal?

The Corporations Act provides a straightforward pathway to sign documents without a common seal. This is the default method most Australian companies rely on day-to-day.

Using Section 127 Of The Corporations Act

A company can execute a document without a seal if it’s signed by either:

• Two directors; or
• A director and a company secretary; or
• A sole director (whether or not the company has a secretary).

That last point matters. Following 2022 reforms, a sole director of a proprietary company can execute documents under section 127 even if there is no company secretary. This signing method creates a presumption of due execution, which helps banks, registries and counterparties verify the document quickly. If you’d like the exact wording for your signature blocks, it’s worth reviewing section 127.

Executing Deeds Without A Seal

Companies can generally execute a deed without a common seal by signing under section 127. To be safe, ensure the document is clearly expressed to be a deed and that any remaining formalities are met (for example, the concept of “delivery” of the deed).

If your document must be a deed - such as a deed of settlement, deed of novation or deed of variation - it’s important to set up the execution block correctly. If you’re not sure whether you’re dealing with a contract or a deed, start with a plain-English refresher on what a deed is and how it differs from standard agreements.

Electronic Signatures And Counterparts

The law now recognises electronic execution for most business documents and, in many cases, deeds signed by companies. If you plan to sign electronically, make sure the method reliably identifies the signatory, shows their intention to be bound, and that everyone agrees to e-signing.

For smooth online sign-offs, align your workflows with the accepted safe harbours for signing documents, consider whether the parties will sign in counterparts, and decide when you should still use wet ink or electronic signatures to avoid delays with specific registries or authorities.

When Is A Common Seal Still Useful (Or Expected)?

While optional, a seal can be handy in some scenarios - and in limited cases, you may be expected to use one.

• Your Company Constitution: Some constitutions still include rules for using the seal, including witnessing requirements. If you’ve adopted a bespoke Company Constitution, check what it says so your process aligns with your internal rules.
• Legacy Processes And Forms: Certain registries, older property forms or foreign authorities may still expect to see a seal on particular documents.
• Counterparty Preference: Some banks or overseas counterparties are more comfortable accepting sealed deeds. If using a seal avoids back-and-forth, it can be the pragmatic choice.
• Formality And Presentation: For ceremonial or heritage-style documents, a board may prefer the formal look of a seal in addition to director signatures.

Important: a seal is never a substitute for proper authority. If your constitution or board delegations require approval before the seal is applied, make sure that step happens first - a short board Directors Resolution before affixing the seal is good governance.

Keeping A Common Seal? Follow These Best Practices

If you decide to keep a common seal, a simple, clear internal policy will make sure it helps - not hinders - your process.

1) Check Your Constitution (Or Replaceable Rules)

Start by reviewing your constitution. If it contains outdated or unclear seal provisions, consider updating it to reflect how you actually operate. If you rely on the replaceable rules, note there’s no requirement to have a seal. If you need to modernise or adopt a new document, our team can help you adopt a fit‑for‑purpose Company Constitution.

2) Approve A Seal Policy And Delegations

Record who can authorise use of the seal, and in what circumstances. Many boards either require a resolution for each use, or delegate authority to specified officers for routine documents. Keep it simple and clear.

3) Design, Order And Secure The Seal

Your seal should show the company’s full name and ACN (many also include the words “Common Seal”). Order the seal from a reputable supplier and store it securely when not in use.

4) Keep A Seal Register

Maintain a short register noting the date, document name, authority (for example, the board resolution reference) and who witnessed affixing the seal. This creates a clean audit trail if questions arise later.

5) Set Witnessing Requirements

Mirror the familiar section 127 pattern: require signatures near the seal impression from either two directors, a director and a secretary, or (for proprietary companies) the sole director. Make sure this aligns with any rules in your constitution.

6) Use Clear Signing Blocks

Where a document expects a seal, use a panel that says “Affix the Common Seal of ACN in the presence of …” with signature lines for the required officers. For documents signed without the seal, stick to standard section 127 wording so the presumption of due execution applies.

Common Seal Or Section 127: Which Should You Use?

For most transactions, default to section 127 execution without a seal. It’s simple, widely accepted and works for everyday contracts and most deeds - including electronic execution where appropriate.

Consider using the common seal if any of the following apply:

• A counterparty, registry or foreign authority expressly asks for a sealed document.
• Your constitution requires the seal for certain categories of documents.
• You’re dealing with legacy forms that haven’t been updated for modern execution methods.

Otherwise, sticking with section 127 reduces administrative overhead and avoids confusion about who can apply the seal.

What Can Go Wrong If A Seal Is Misused?

A seal adds formality, but it can introduce risk if not managed carefully. Watch for these pitfalls:

• Affixing Without Authority: Applying the seal without a board resolution or proper delegation may undermine the execution and create internal disputes.
• Ignoring Constitution Rules: If your constitution prescribes how the seal must be used or witnessed, not following the process can affect enforceability.
• Using The Wrong Execution Block: A seal won’t fix poor drafting or missing deed formalities. Ensure the document is legally sound, uses the correct deed language if relevant, and includes the right execution panel.
• Mixing Methods: Don’t combine a physical seal with an e-signature workflow unless the document and parties clearly allow it. Choose one consistent method and meet the signing requirements.

A short written policy and a simple checklist usually eliminate these issues. It’s also a good time to refresh your internal precedents, including deed/contract templates and signature blocks.

Key Takeaways

• Australian companies don’t need a common seal - most documents can be signed under section 127, including by a sole director even if there’s no secretary.
• Deeds can generally be executed without a seal when signed correctly; make sure the document is clearly a deed and any remaining formalities are met.
• Electronic execution is widely accepted - decide when to use e‑signing, when wet ink is still required, and whether signing in counterparts makes sense.
• Keep a seal only if it’s practical for legacy forms, foreign authorities or where your constitution or counterparties expect it; otherwise, section 127 is simpler.
• If you keep a seal, align your process with your Company Constitution, approve a policy, maintain a seal register and document authority via a Directors Resolution.
• Refreshing your templates and following the recognised signing requirements will reduce risk and speed up transactions.

If you’d like a consultation about common seals, company execution methods or updating your Company Constitution, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.