Digital Company Stamp / Seal

Hi, Can you please help me with following queries on digital stamp:

  1. Legal implications of using digital company stamp or seal?
  2. Does it hold same value or purpose as physical seal?
  3. Who is responsible for safe keeping this digital stamp - IT or HR?
  4. Where do I get the digital stamp and seal for the company? Legal Firm? Online?
  5. For digital stamp to be created, does it need to hold only registered address ? or Branch office address are allowed?
    Thanks
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Hey @arshamercy ,

Please find below the answer to your queries.

Hi, Can you please help me with following queries on digital stamp:

A company’s common seal is dealt and governed by the provisions of Companies Act.

As the company is an artificial / legal / juridical person, it is represented by affixing the common seal as its signature on the documents. As per the Companies Act, a company shall have its common seal from the date of its incorporation. But the Act is silent about the form of seal, how to affix, who should be the custodian, etc. The Council of the Institute of Company Secretaries of India has issued certain standards and guidelines regarding this.

Company Seal is used to represent and validate the authenticity of a document in which it is affixed. A company seal is approved and passed by a board resolution for validation. Generally, the company seal is used on certain instruments and documents for limited purposes, by the authorized signatory of the company, and remains in the custody of authorized signatory or personnel. It is not recommended to keep the company seal available for any and all personnel to prevent any misuse.

Digital signatures, electronic signatures, e-contracts, electronically signed instruments are legally valid and are governed by the provisions of Information Technology Act, and Indian Contract Act. Indian Evidence Act prescribes the procedures to follow while electronic instruments are challenged in the courts to provide the evidentiary value.

Legal implications of using a digital company stamp or seal?

The authenticity and evidentiary value of a digital seal is subject to the board resolution of the company, the transactional details related to seal purchase, mode of affixing the digital seal and whether the document or instrument is signed by the authorized signatory of the company. The authorized signatory is chosen by passing a board resolution and copy of such BR can be asked for verification.

Does it hold the same value or purpose as a physical seal?

As stated above, a company seal is the signature of the company authenticating the validity and binding force of a document. When an organization uses digital seal or the physical seal, a signature of the authorized signatory along with such digital / physical seal goes as a part and parcel. The sign and seal are essentially required to bring in the binding force. By virtue of the sign and seal, the seal gets validated. A signature without a seal in certain circumstances are acceptable based on other supporting facts and evidence. A mere seal without any signature carry minimal value.

Who is responsible for safe keeping this digital stamp - IT or HR?

The authorized signatory, or the legal department of the company, or any other designated personnel holding the responsibility and accountability of handling sensitive controls, will be the custodian for digital signature keys, e-signature initiating tools, company seals, etc.

Where do I get the digital stamp and seal for the company? Legal Firm? Online?

Either it can be procured online, offline from any digital stamp making vendor, or can be made inhouse.

For a digital stamp to be created, does it need to hold only registered addresses ? or Branch office addresses are allowed?

If an organization wants to have a digital stamp, it is a recommended practice to make a resolution identifying and approving the digital stamp with a copy of the stamp format and based on the requirement if one or more addresses are required all such stamp formats can be annexed to ensure what has been approved and designate who is in charge for its safe custody and usage.

Expert courtesy to Bhuvana Anand

Thanks & Regards,

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@Kaulin Thank you for an elaborate answer. This is much helpful.

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And Thanks to @Bhuvana_Anand :slight_smile:

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