(Sec Update) Is Common Seal Required in Malaysia

What Is Common Seal?

In Malaysia, the common seal is a significant component of corporate documentation, representing a stamp or embossing tool used by companies to imprint their official seal on various documents. This seal typically features the company's name and registration number engraved in legible romanised characters, serving as a hallmark of authenticity and authority.

It is commonly utilized to authenticate legal documents such as contracts, agreements, deeds, and share certificates, providing assurance and validity to such transactions.

Is the use of a common seal mandatory for Malaysian companies?

Despite its importance, the use of a common seal is not mandatory under the Companies Act 2016 in Malaysia.

However, it remains a prevalent practice among Malaysian companies due to its perceived value in adding an extra layer of authenticity to their documents.

Official Seal For Use Abroad

Can Malaysian companies use the common seal for transactions abroad?

Regarding international transactions, Malaysian companies may employ an 'official seal' when operating outside the country's borders. The official seal is essentially an authorized version of the common seal, augmented with additional information specifying the location where it is intended for use.

How can Malaysian companies authorize the use of the official seal for international transactions?

Companies may authorize designated individuals, appointed for this purpose and acting under the company's common seal, to affix the official seal to relevant documents. It is imperative that the person affixing the official seal provides written certification on the document, specifying the date and place of sealing.

Are there any limitations or conditions regarding the establishment of an official seal for international use?

It is essential to note that the establishment of an official seal for international use may be subject to specific limitations or conditions outlined in the company's constitution. Therefore, companies must adhere to any relevant provisions governing the use of official seals for transactions conducted outside Malaysia.

Official Seal for Share Certificate

A company that has a common seal may have an official seal to seal securities issued by the company, or documents creating or evidencing securities so issued.

The official seal, as outlined in Section 63(2), bears distinct characteristics. It must replicate the company's common seal precisely, with the additional inclusion of the word \'\'Securities\'\' on its face. This distinguishes it from the common seal, signifying its specific application to securities-related matters.

Furthermore, when the official seal is duly affixed to the document in question, it carries the same legal effect as the company's common seal. This underscores the importance and validity of documents sealed with the official seal in the eyes of the law.

Key Takeaways

In conclusion, the common seal holds significant importance in Malaysian corporate documentation, providing authenticity and authority to various legal documents. While not mandatory, its use remains prevalent among Malaysian companies due to its perceived value in enhancing document credibility.

Additionally, for transactions abroad, Malaysian companies may utilize an official seal, authorized for specific international use. The establishment and usage of an official seal, including for sealing securities and related documents, ensure compliance with legal requirements and maintain the integrity of corporate transactions both domestically and internationally.

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