Corporate kit and seal
written by: yalman78
Amendments to the US corporation laws have dispensed with the need to affix corporate seal on every document that is material such as deeds, and share certificates. However, the amendments have also let corporations to internally govern the usage of corporate seal. A corporate seal is usually referred to as common seal. There are many countries that continue to use corporate seals as a proof of document's authenticity.
Corporation's constitution may require that common seal of the Company be affixed on important documents in the presence of two directors, or a director of the company and company secretary. In case the company is a sole proprietor business, such seal may be affixed in the presence of its proprietor. Such directors, proprietors, and others witnessing the usage of common seal on the document also sign the document, proving that they were aware of the contract, and have accepted the terms and conditions mentioned in the deed. Therefore, common seal continues to be an important way of concluding business contracts, even though its usage is no longer mandatory under the US Corporation Law.
Basically, company seal is a metallic instrument that embosses the full name of the company when pressed. The seal also embosses the company's registration number. Company seal may be round or rectangular in shape. Such seals are also available in different sizes.
Corporate kit consists of a binder that has a few minute papers, and stock certificates. In addition, transfer ledgers, index tabs, and some corporate record ticklers may also form part of such kit.
Incorporated entities need to record the minutes of their meetings, and issue share certificates within a limited time frame. In addition, they have to record any transfers lodged with them within stipulated time frame. Usually, business enterprises enter into pre-incorporation contracts. These are also ratified, approved, or entered into by the board of directors at their first meeting following incorporation, and such documents may require the common seal affixed on them. Board of directors resolve to affix such seal.
Share transfers also require board's approval. Therefore, corporate record ticklers become important as delays in recording transfers may mean the shareholder losing some benefit such as dividends or rights. Consequently, the aggrieved shareholder can initiate action against the incorporated company and the company may be penalized under relevant provisions of the US Corporation act.
Given such constraints, and the fact that the directors of small and medium business enterprises would be rather busy in the initial stages following incorporation, it is always better to order a corporate kit and common seal from any online stores that has been in this line of business for reasonable number of years. By ordering such kit, directors reduce the headaches of organizing the printing and making of share certificates, minutes papers, and seals. Moreover, ordering the contents of the corporate kit from different sources may eventually prove to be rather expensive, partly because the quantities of share certificates, minute papers, index tabs, etc., required initially are not much.
Special type of paper is used for making physical share certificates. Such share certificates also have the name of the company, and its registered office address displayed prominently on them. One of the most important features of such certificates is their serial number. Each share certificate bears a serial number to prevent its misuse and theft. This is not the same as the share certificate number that is printed on the face of the share certificate.
It is also necessary to keep documents relevant to corporation organized in a way that they can be accessed easily and replaced in their folder with equal ease. Index tabs and corporate ticklers are useful for such functions. Such tabs make it easier for placing the papers, bylaws, minutes, transfer documents, etc., and organizing other papers as needed with the help of ticklers. Tabs are important because some important documents such as certificate for incorporation need to be maintained in a place that is accessible, and yet there should be no scope for them getting mingled with other papers that move around in the offices. Usually, a director is assigned the responsibility of keeping all such important papers in his or her safe custody. But the convenience offered by index tabs and corporate record ticklers makes the task easier for such authorized director. All such documents and papers are held in a compact binder forming part of the corporate kit.
Such corporate kit and seal can be ordered from online stores. As of date, these may cost anywhere between $20 and $150, depending upon the quality and size of the binder, share certificate design, and other contents of the kit.