One of the primary innovations of the new law on company affairs is the modification on the use and necessity of a company seal.
This post seeks to assess and inform our readers on the regulatory position on this subject to ensure there is maximum compliance in this regard if need be.
To begin with, it is vital to understand what a company seal is. That leads to the next subheading.
What Is A Company Seal?
A company seal could be described as a stamp that corporates use to finalize contracts and execute documents. In Nigeria, and pre-CAMA 2020, the law mandated all bodies who are corporates to have a company seal and to use such seals in required matters.
However, with the new law, the position has changed and companies need to take note. Thus, S. 98 of CAMA 2020 is apt in this regard. Here, companies are now not necessarily required to have company seals but in the event that they choose to, they are bound by the following conditions as provided by CAMA.
One is that the design and use of the seal must be regulated by the company articles. The company articles are your company’s constitution and regulate the manner in which your corporate affairs are conducted.
The name of the company must also be engraved on the seal itself and in legible characters.
It is important to also weigh in on what official seals are and how they differ from the ordinary company seals.
What Are Official Seals?
The law makes additional provision for official seals and defines its purpose.
Official seals are used by companies whose objects require or comprise transactions of business in foreign countries.
In other words, while company seals are employed in local matters, official seals are used in international affairs.
It is noteworthy that the conditions applicable to company seals are equally applicable to official seals.
Corporate start-ups need to ensure that whatever seals they use in these times align with the afore mentioned requirements.
Additionally, the company’s articles must comprehensively touch on all material matters affecting the company seals.
Note that it is not mandatory to have a company but where you do, you have to comply with the law.
Do you want to have a company seal or have you been using your seals in a manner inconsistent with the above? Consult your lawyers for proper advisory as soon as possible.
Have any questions? Book a call with us today!
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References
- Companies and Allied Matters Act 2020 available at https://www.cac.gov.ng/wp-content/uploads/2020/12/CAMA-NOTE-BOOK-FULL-VERSION.pdf accessed on September 18 2023
- Jessica Coventry, “What is a Company Seal and Does My Company Need One?” available at https://legalvision.com.au/company-seal/ accessed on September 18 2023
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