Common Seal, Uncommon Nuisance

The common seal of an incorporated association is, in its physical manifestation, an inconspicuous and unimposing rubber stamp carrying the words 'Common Seal" and the name and business number of the association.

The common seal is in legal terms the equivalent of the signature of an ordinary individual. Its use is associated with important decisions such as the transfer of land, accompanied by a degree of legal formality, and involves a significant amount of extra work.

It is difficult to imagine that any item so easy to forge would in fact materially strengthen the organisation's security in this area, and in recognition of this obvious fact some - but not all - states have ceased to require it.

If your state's legislation requires a common seal, or if your organisation decides that while not legally required such a seal might impress or reassure third parties, the organisation's constitution must contain provisions covering its custody and use. In states where the legislation requires it, provisions covering its custody and use will be read into the constitution if they are for any reason omitted.

Such a seal may be obtained from any manufacturer of rubber stamps (whose details may be found in the Yellow Pages) and many footwear repair establishments.

In any case, the use of the common seal should be restricted to the minimum number of cases, which would include

Significant contracts (i.e. not the purchase of a roll of stamps)

Real (landed) property transfers and land contracts

Loan documents, mortgages and guarantees

Occasions where its use is required by a third party

Consult the relevant legislation to see whether it permits alternative and simpler alternatives, such as the signature of the secretary or public officer (in Victoria, for example, the legislation provides that "A document or proceeding requiring authentication by an incorporated association may be authenticated by the signature of the public officer of the incorporated association and need not be authenticated under the common seal of the incorporated association."

It is certainly not necessary to use the common seal for all business. For instance, there is no need to use the common seal to approve the minutes of the previous meeting. The minutes will still be accepted in the usual way.

Where the organisation has a seal, arrangements for custody of the seal must be specified in the organisation's constitution; for example,

"The common seal must be kept securely by the management committee"

or

"The common seal of the Association must be kept in the custody of the Secretary."

Where the common seal is used, its form is regulated by provisions in the organisation's constitution, which may be regulated by applicable Acts and Regulations. Examples of possible provisions are;

Each instrument to which the seal is attached must be signed by a member of the management committee and countersigned by -
(a) the secretary; or

(b) another member of the management committee; or

(c) someone appointed by the management committee".

or

The common seal must not be affixed to any instrument except by the authority of the committee and the affixing of the common seal must be attested by the signatures either of two members of the committee or, of one member of the committee and of the public officer of the Association.

Note that this does not imply that the decision to ratify the instrument can be taken by these people; that must be done by resolution of the board. All that these people are doing is witnessing that the decision of the board has been carried out.

All uses of the common seal should be recorded in a special register. The register provides a convenient record of the use of the common seal together with a cross reference to the management committee minute authorising its use.