Does Your Business Need A Company Seal? Understanding Common Seals For Australian Companies (My Sealand Guide)

When you’re setting up or running a company in Australia, you’ll come across a lot of new terms and processes. One that often pops up is the “company seal” or “common seal.” You might also hear people say “my sealand” in conversation - usually it’s just a misheard reference to a common seal.

So, do you actually need a seal today? Or is it an outdated formality you can skip?

The short answer: most Australian companies don’t need a seal for day‑to‑day business. But seals can still serve a useful purpose in some situations, and if you choose to keep one, there are clear rules to follow so your documents are properly executed.

In this guide, we’ll walk through what a common seal is, whether your company needs one, how to validly sign documents with or without a seal, and best practice if you decide to keep a seal on hand.

What Is A Company Seal (And Why People Say “My Sealand”)?

A company seal (also called a “common seal”) is a physical stamp or embossing device engraved with your company’s registered name and Australian Company Number (ACN). When the seal is affixed to a document, it signifies the company’s formal execution of that document.

Historically, sealing was the primary way a company could execute deeds and other important instruments. Today, the Corporations Act 2001 (Cth) allows companies to execute documents in a range of ways, so a seal is generally optional.

You’ll sometimes see or hear people refer to “my sealand” - typically it’s just shorthand or a misheard version of “my seal” or “common seal.” The correct term in Australian company law is “common seal.”

If you do order a seal, it usually includes:

• the company’s registered name
• the company’s ACN
• the words “Common Seal” (optional but common)

There is no requirement to include your ABN on a common seal. The ACN is the relevant identifier for companies.

Do Australian Companies Still Need A Common Seal?

For most companies, no - a common seal is not legally required. The law recognises several valid ways for a company to execute documents, and the most common method is by officer signatures under section 127 of the Corporations Act.

However, some companies still choose to have a seal because:

• It can add formality for high‑value or sensitive documents.
• Some overseas counterparties or public authorities expect or request it.
• Certain internal policies or older constitutions contemplate using a seal for specific actions.

If your business is in a traditional sector, negotiates with international parties, or has counterparties that prefer a seal, it can be useful to keep one. Otherwise, most modern Australian companies execute everything with signatures alone.

If you’re unsure what your constitution says about seals, it’s worth reviewing or updating your Company Constitution so your internal rules match the way you actually operate.

How To Execute Documents With Or Without A Seal

Australian companies can validly execute documents in several ways. The approach you choose should reflect your counterparties’ expectations, your constitution and your internal risk settings.

1) Signing Under Section 127 (No Seal)

Under section 127(1) of the Corporations Act, a company can execute a document without a common seal if it is signed by:

• two directors; or
• a director and a company secretary; or
• for a proprietary company with a sole director - that sole director (even if there is no company secretary).

Documents signed this way benefit from statutory assumptions that make it easier for the other party (and courts, banks and registries) to accept the document as validly executed. Many businesses rely on signing under section 127 for everyday contracts and deeds.

2) Using A Common Seal Under Section 127(2)

Alternatively, a company may execute with its common seal under section 127(2) if the seal is fixed to the document and the fixing of the seal is witnessed by:

• two directors; or
• a director and a company secretary; or
• for a proprietary company with a sole director who is also the sole company secretary - that sole director.

In practice, this means a proprietary company with a sole director and no company secretary cannot rely on section 127(2) for seal execution unless its constitution provides an alternative mechanism. If you have (or want) a sole director structure without a secretary, it’s generally simpler to execute without a seal under section 127(1).

3) Electronic Execution Is Permitted

Australian company law now expressly recognises electronic execution for most company documents (including deeds) when certain requirements are met. You can sign with qualified e‑signature platforms or by other reliable methods that identify the signatory and indicate their intention to sign.

You don’t need an “electronic seal.” If you’re executing electronically, use valid officer signatures rather than replicating a paper seal. If you want to compare methods, this overview of wet ink signatures vs electronic signatures explains the key differences.

What About Witnessing?

When you execute with a common seal, the “witnessing” contemplated by section 127(2) is the witnessing by the relevant officers (e.g. two directors) as they fix the seal. Separate independent witnesses are generally not required under the Corporations Act for company execution.

For non‑company signatories, property dealings or where a registry specifies extra formalities, witnessing rules can differ by jurisdiction and document type. If in doubt about witness requirements, check the governing legislation or refer to practical resources on who can witness a signature and what makes a valid signature.

Are There Situations Where A Seal Is Still Requested?

Occasionally, overseas authorities, banks, registries or conservative counterparties will ask for a sealed document. Some state land and titles offices also have specific forms and execution requirements for instruments that transfer or secure interests in land. In these cases, ask what they’ll accept under section 127; if they still insist on a seal, you’ll be glad to have one available.

Pros, Cons And Risks Of Using A Seal

Thinking of ordering a common seal? Weigh the benefits and the trade‑offs for your business.

Benefits

• Formality and confidence: A seal can add gravitas to high‑value transactions and reassure counterparties that company procedures were followed.
• International acceptability: Some foreign counterparties or authorities still prefer or require sealed documents.
• Internal control: If your policy says “seal required” for certain deals, it can function as a deliberate checkpoint before the company commits.

Potential Downsides

• Not essential for most documents: It’s an extra cost and process that many companies never use.
• Process confusion: If staff misunderstand when to use a seal (or assume it’s always required), that can slow transactions or create execution errors.
• Security risk: A misplaced or misused seal can expose the company to unauthorised commitments if controls are weak.

For most early‑stage or growth companies, executing via officer signatures under section 127(1) is the cleanest, most flexible option. A seal is “nice to have” if your stakeholders expect it, but not a must‑have.

Best Practice If You Keep A Seal

If you do maintain a common seal, set simple internal rules so its use is safe and consistent.

• Check your constitution: Confirm whether the constitution mandates a seal for any acts and whether it sets specific procedures. Update the Company Constitution if the rules are outdated.
• Secure storage: Keep the seal locked away with controlled access. Treat it like company letterhead plus authority to bind.
• Clear authorisations: Decide which roles may approve affixing the seal, and for what types of documents or thresholds.
• Seal register: Maintain a simple log of when, why and by whom the seal was used. This helps with governance and audit trails.
• Use the section 127(2) formula: When you do seal, ensure the correct officers witness the fixing of the seal and sign as required.
• Prefer signatures where practical: For routine contracts, signatures under section 127(1) (including electronic execution) will usually be faster and equally effective.

A short board or director resolution that sets out how the seal may be used is also useful. If you need a starting point for internal approvals, a simple Directors Resolution can formalise who is authorised to execute documents and when the seal (if any) should be applied.

Key Legal Documents And Policies To Support Execution

Whether or not you have a seal, strong governance and clear documentation reduce risk and speed up deals. Consider these foundational documents.

• Company Constitution: Sets your internal rules, including director powers, document execution and use of the seal. A modernised Company Constitution avoids ambiguity and matches current practice.
• Board/Director Resolutions: Record who is authorised to sign, approve transactions or affix the seal. A concise Directors Resolution keeps your file tidy for banks, auditors and investors.
• Shareholders Agreement: If there is more than one shareholder, a Shareholders Agreement sets decision‑making rules, approvals for major deals and dispute‑resolution pathways - all of which intersect with how and when the company executes key contracts.
• Customer Terms and Supplier Contracts: Standardised, up‑to‑date terms reduce negotiation friction and make execution consistent across deals.
• Employment Contract: If you have staff, use a compliant Employment Contract template so new hires are onboarded smoothly and signed correctly every time.
• Privacy Policy: If you collect personal information online or offline, publish and maintain a compliant Privacy Policy and make sure it’s approved and executed by the right officers.

For day‑to‑day execution, many companies now rely on a digital signing process that aligns with section 127. If you’re rolling this out, make sure your signing platform can clearly identify signatories, keep an audit trail, and reflect each officer’s intent to sign. That way, your documents are enforceable and your process is efficient.

Execution Hygiene Tips

• Use the same name format and titles for officers each time (e.g. “Jane Doe, Director”) to minimise questions from banks and counterparties.
• Include the ACN on the signature block for clarity, especially if the company trades under a business name.
• Avoid mixing methods on the same document (e.g. one officer electronic, the other wet ink) unless your process clearly supports split execution in compliance with the Corporations Act.
• Keep copies of signed or sealed documents and any approvals or board minutes that authorised the transaction.

Common Pitfalls To Avoid

• Assuming ABN is required on a seal: It isn’t. The ACN is the key identifier for companies.
• Using a seal without officer witnessing: Under section 127(2), the relevant officers must witness the affixing of the seal and sign accordingly.
• Over‑engineering simple deals: If a counterparty is comfortable with section 127(1) signatures, don’t hold up execution waiting on a physical seal.
• Ignoring registry requirements: Titles offices and some regulators have their own rules for specific instruments. Check them early to avoid re‑work.

Key Takeaways

• Common seals are optional for most Australian companies. The Corporations Act allows you to execute documents by officer signatures under section 127 without using a seal.
• If you do use a seal, follow section 127(2): affix the seal and have the correct officers witness and sign. Keep the seal secure and maintain a simple register of use.
• Electronic execution by company officers is now expressly permitted for most documents (including deeds), so there’s usually no need for an “electronic seal.”
• Some foreign counterparties, regulators or registries may still prefer a sealed document. If those stakeholders matter to your business, keeping a seal on hand can be helpful.
• Good governance supports smooth execution: align your Company Constitution with current practice, record authorisations with a Directors Resolution, and use consistent signing processes.
• For multi‑founder companies, a Shareholders Agreement clarifies approvals for major transactions so everyone understands when and how documents will be executed.
• When you need certainty about witnessing or execution requirements, rely on section 127 execution and check any registry‑specific rules early.

If you’d like a consultation on setting up your company execution process, updating your constitution or deciding whether to keep a common seal, reach out to us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.