What Is a Common Seal in Australia? Essential Guide for Companies

When you’re setting up or running a company in Australia, you’ll likely hear the term “common seal” pop up. If you’re not from a legal background, it can sound like yet another piece of jargon to decode. The good news is that understanding what a common seal is (and whether you actually need one) is straightforward once you know how company signing works under the Corporations Act.

In this guide, we’ll explain what a common seal is, when companies choose to use one, how to use it properly, and the practical alternatives most Australian businesses rely on today. We’ll also cover the records you should keep and the key documents that help your board control and evidence the signing process with confidence.

If you’re ready to demystify common seals and tighten up your company’s execution practices, let’s dive in.

What Is a Common Seal?

A common seal (sometimes called a company seal) is a physical stamp that displays your company’s full legal name and Australian Company Number (ACN). Historically, companies affixed the seal to documents to show the company itself had formally agreed to them.

Think of it as the company’s official “stamp of approval,” distinct from an individual director’s signature. In practice, the seal is pressed or stamped onto the document next to the execution block and, if required, witnessed by the appropriate officers.

• Design: Usually a rubber or metal stamp with the company name and ACN clearly legible.
• Who uses it: Only companies registered with ASIC (not sole traders, partnerships or trusts).
• Purpose today: Mostly ceremonial, constitutional or overseas counterpart-driven-because Australian law now recognises other ways for companies to execute documents.

Do Australian Companies Need a Common Seal Under the Corporations Act?

No-having a common seal is optional under the Corporations Act 2001 (Cth). Companies used to rely on seals for most formal documents, but the law has evolved to recognise several execution methods, with or without a seal.

Where the Law Lands Today

Under section 127 of the Corporations Act, a company can execute documents with or without a seal. The key point is that documents signed in line with section 127 attract a “statutory assumption” that they’ve been properly executed, which gives comfort to the other side.

In short:

• A common seal is not legally required.
• If you have a seal, your constitution (or the replaceable rules) will set out how it’s used and who must witness it.
• You can execute documents without a seal using officer signatures (we’ll cover the combinations below).

When Companies Still Use a Common Seal

Even though the law doesn’t require a seal, there are scenarios where it’s still used:

• Constitutional requirement: If your Company Constitution mandates a seal for certain acts, you must follow it unless you amend those rules.
• International dealings: Some overseas counterparties or authorities expect a physical seal on deeds, certificates, or formal instruments.
• Formality: Boards sometimes prefer a seal for ceremonial or high-profile documents (for example, original share certificates or milestone agreements).

How To Use a Common Seal Properly

If your company has adopted a common seal, it’s important to use it in a controlled and consistent way. A typical process looks like this:

1. Authority: The board authorises the use of the seal for a specified document (commonly via a board minute or a Directors’ Resolution).
2. Affixing the seal: The seal is physically stamped on the document in the execution block.
3. Witnessing and signatures: Two directors, or one director and one company secretary, sign next to the seal. For a proprietary company with a sole director who is also the sole secretary, that sole director can sign alone.
4. Record-keeping: You note the date, document, authorising resolution, and the officers who signed, in a simple seal register or board minutes.

It’s best practice to store the seal securely, limit access to authorised people only, and keep an internal log of when it’s used. This helps with governance and, if required later, proves the circumstances of execution.

Who Can Sign Next To the Seal?

If your constitution mirrors section 127, the acceptable combinations typically include:

• Two directors; or
• A director and a company secretary; or
• For a proprietary company with a sole director who is also the sole secretary, that individual alone.

If your constitution sets different witnessing requirements for affixing the seal, follow those rules instead.

Alternatives To Using a Common Seal (What Most Companies Do)

Most Australian companies execute documents without a seal by relying on officer signatures under the Corporations Act. This is faster, simpler, and works well in distributed teams.

Execution Under Section 127

Executing under section 127 is the most common approach. In practice, you sign as follows (no seal required):

• Two directors; or
• A director and a company secretary; or
• For a proprietary company with a sole director who is also the sole secretary, that individual alone.

Documents executed this way give the counterparty the statutory assumption that the document is duly executed by the company.

Authority Under Section 126

Companies can also empower individuals to enter into contracts on their behalf under section 126 of the Corporations Act. This covers representatives (for example, an executive or authorised employee) acting with the company’s express or implied authority. While section 126 can be very useful for day-to-day contracting, counterparties often prefer section 127 for important documents because of the statutory assumptions it provides.

Electronic Signatures and Remote Execution

Australia has now embedded permanent reforms for electronic execution of company documents. Many agreements (including deeds) can be executed electronically if the method identifies the signer and indicates their intention to sign, and the integrity of the document is maintained.

If you’re moving away from physical seals, make sure your processes accommodate e-signing tools and that your execution block makes sense for the method you’ll use. For a deeper look at this, see the differences between wet ink signatures vs electronic signatures.

What About Deeds?

Deeds often attract extra formality. The Corporations Act allows deeds to be executed under section 127, including electronically (subject to current legal requirements). Some counterparties-especially overseas-still request a seal on deeds for comfort or policy reasons. If a deal involves unique risks or cross-border issues, it’s worth confirming execution requirements early. For context on deeds generally, here’s a plain-English guide to what a deed is in Australian law.

Practical Tips When Counterparties Ask for a Seal

• Check your constitution to confirm who must witness the seal and how it’s affixed.
• Confirm whether the other party will accept section 127 execution instead. It’s often quicker and equally robust in Australia.
• If the other party is offshore, allow time for physical stamping and couriering if they insist on a sealed original.

Governance: Records, Controls and Your Constitution

Good governance is about clarity and consistency. Whether you use a seal or not, put basic controls around execution so everyone knows who can sign and how.

Update Your Constitution If Needed

Your Company Constitution should outline how documents are executed and, if you have a seal, when and how it’s used. If the rules feel outdated (for example, they require a seal for routine matters), consider updating them so they reflect how your company actually operates-especially if your team executes documents electronically.

Keep a Clear Paper Trail

For sealed documents, maintain a simple register or board minute noting:

• When the seal was used (date and document name).
• Who authorised it (e.g. board resolution reference).
• Who witnessed and signed next to the seal.
• Where the original is stored.

For documents executed without a seal, your board minutes, authority matrix and file-naming conventions can serve the same purpose-showing you’ve followed the correct process and who approved what.

Who Can Approve What?

It’s sensible to map out an authority matrix that says who can sign which types of contracts and at what value. This can sit alongside template resolutions and a standard execution block. If your board prefers formal paperwork, a simple Directors’ Resolution template streamlines approvals for recurring matters.

Essential Company Documents To Get Right

Your seal (if you have one) is just one tool in your execution kit. The documents below help your company sign correctly, manage risk, and stay organised as you grow.

• Company Constitution: Sets the rules for running your company, including execution methods and any seal requirements. Consider an up-to-date Company Constitution that reflects electronic signing and modern board practices.
• Board and Officer Authorities: Board minutes and resolutions define who is authorised to sign and for what purposes. A reusable Directors’ Resolution template helps standardise approvals.
• Shareholders Agreement: Outlines decision-making, ownership, transfers and dispute pathways. It complements your constitution, especially where there are multiple founders or investors.
• Contract Templates: Ensure your standard customer agreements, supplier contracts and NDAs are current and include practical execution blocks for section 127 signatures and e-signing.
• Privacy Policy: If the Privacy Act applies to your business (for example, you are an APP entity or otherwise required to comply), a clear Privacy Policy sets out how personal information is handled. Even if the Act doesn’t strictly apply, many businesses adopt one as best practice and because customers, platforms or partners expect it.
• Employment Contracts and Policies: If you’re hiring, ensure you have solid employment agreements and workplace policies so roles, responsibilities and obligations are clear from day one.

Not every company needs every document immediately, but getting your foundations right early saves time and reduces friction when deals move quickly.

Execution Clauses Worth Checking

As you refresh your templates, confirm your execution clauses work with how you actually sign:

• Include a section 127 execution block for companies.
• Provide a pathway for electronic signatures (and ensure your process identifies signers and captures intent).
• Use an appropriate execution block for deeds, noting any jurisdictional or counterparty requirements.

If a transaction is sensitive, high-value, or cross-border, it’s worth sanity-checking the execution method early so you’re not scrambling at signing time. A short note capturing the method of execution and authority can sit on file with the final document. If you want a broader overview of what “valid execution” looks like in Australia, this practical explainer on the legal requirements for signing documents is a helpful reference.

When To Get Help

If a counterparty is asking for a seal and your team usually executes under section 127, or you’re dealing with deeds, remote signings, or offshore requirements, it’s a good time to get tailored advice. It’s a simple way to avoid delays or having to re‑execute later.

Key Takeaways

• A common seal is optional in Australia-most companies execute documents without one using officer signatures under section 127 of the Corporations Act.
• If you keep a seal, follow your constitution on when and how it’s used, who must witness it, and record each use in a seal register or board minutes.
• Section 127 allows documents to be executed without a seal and supports sole director execution for proprietary companies where the sole director is also the sole secretary.
• Section 126 lets authorised representatives bind the company to contracts, but important documents are often executed under section 127 for the statutory assumptions it provides.
• Electronic execution is widely accepted if done correctly-plan your execution blocks and processes so they work for e‑signing and for deeds where required.
• Strong foundations matter: align your constitution, authorities and templates with modern execution practices, and use governance records to evidence approvals.

If you’d like a consultation on setting up execution processes for your Australian company-whether that involves a common seal, section 127 execution or electronic signing-you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.