Who Should Get Official Letterhead and Stamps in the Company? Let's Discuss!

I have some queries about official letterhead and stamp availability to employees in the company.

Which employees in the company should have official letterhead?
Should the official letterhead be provided in soft copy or hard copy to the employees mentioned above?
Should the round stamp (bearing the company name and address) be available to HR, Accountants, or should they be provided a stamp with the company name and their designation?

Looking forward to your reply. Thank you.

Dear member,

The replies to your questions are as below:

Who should have official letterhead?

Reply: HODs and above. While handing over the charge of their duties, the unused letterheads must be returned or handed over to the successor/reliever.

Should official letterhead be given in soft copy or hard copy?

Reply: It can be both. However, if the letter is issued in hard copy, then the signatory must preserve the office copy with the signature of the recipient. If the official letter is sent by post or courier, the receipt from the post office or the docket issued by the courier company should be attached to the office copy.

Availability of the round stamp

Reply: Generally, the round seal is issued only to the HoD of the Accounts Department. HR or any other functionary may go to the Accounts department and take the round seal if they wish to endorse any official communication. This is done to avoid the misuse of the round seal, and it is always kept under lock. A rubber seal with the designation and company's name may be given to the HODs and above. While handing over the charge of their duties, the possessor has to return or hand over the stamp to the reliever/successor.

Final comments: In the last 20-25 years, electronic communication is gaining momentum. Official correspondence in hard copies has been reduced significantly. Against this backdrop, your query is baffling. In a few industries like pharmaceuticals, it is mandatory to maintain records of the lab tests, the QC inspection reports, etc., in hard copies. HODs are required to sign hard copies of the test reports. Do you have a requirement like this?

Thanks,

Dinesh Divekar

Letterhead and Official Seal

Letterhead

The company should draft a policy for letterhead, which is the official document of the company. Generally, no importance was given earlier. But with electronic communication via email becoming valid, the use of letterhead in its original form has diminished. When communicated by email, the company's official letter appears formal in the email, and people use it as a way of communication. It is digitally signed by authorized personnel for dispatch purposes. When a contract is prepared, an official printed letterhead is typically sought, and individuals physically affix their signatures to it for exchange. (The official seal will be discussed in the next chapter.)

Company Seal

Normally, the company seal—referred to as the common seal—is an official impression seal prepared by the company and kept under lock and key by the corporate office, overseen by the company secretary. When affixed, a resolution must be passed in a board meeting, specifying the names of directors and the secretary signing the document and affixing the common seal of the company. This seal gives legal validity to the document, as the company speaks through it. The secretary cannot affix this common seal without proper authorization. The director, as authorized by resolution and the Articles of Association, guides its administration.

Regarding rubber stamps, in India, there are no specific regulations governing their creation, making them easily copied. However, in countries with robust legal systems, a process exists for making such stamps, requiring a request on the company's letterhead, attached with a copy of the company registration and a purchase order to a verified supplier. These regulations ensure accountability and authenticity in stamp creation.

In summary

1. The common seal can only be affixed by the company secretary with the director's approval.
2. Rubber stamp feasibility should be assessed as mentioned.
3. Use of letterhead should be regulated by the secretary to ensure controlled printing and usage processes, minimizing waste and misuse.

Regards.

My views are as under:

Company as an Artificial Person

A company is an artificial person created by law. A company cannot sign; hence, it has a common seal approved by the directors of the company. As such, the seal can only be used by the company or anyone authorized by the company. Naturally, the company will not authorize dozens of employees to use its seal.

Use of Seals in Banks

In a bank, when we go to verify our signature or any other certificate, the officer puts his signature, his authority number, and the round seal of the bank. This is because the bank officer has to verify many documents every day.

Use of Letterhead in Companies

In any other company, a seal is not used frequently. Rather, it is not used. What is used is a letterhead. The name and designation of the person signing are typed along with their position. Under the service rules or standing orders, the manager is authorized to use the letterhead. The manager is not every head of department (HOD).

A letterhead is used when communication is with an outsider, e.g., a candidate, supplier, inspector, etc. For internal communication, a blank paper or an inter-office memo is used where there is no seal or letterhead.

Soft Copy and Hard Copy Usage

What applies to hard copy also applies to soft copy. The company ensures that it is not misused.

Difference Between Seal and Rubber Stamp

A seal is not a rubber stamp; it is an embossing machine. We see it on share certificates or degree certificates from the university. It cannot be tampered with. The paper used is also a special quality, thick, long-lasting paper. The round rubber stamp is a medium only for authentication and convenience.

Stamp Making Process

When one goes to a stamp maker, the stamp maker demands a letter on letterhead. This is because no one can get any stamp made for any company. However, those who want to illegally cheat anyone can get anything, which is unfortunate.

Regards, Vibhakar Ramtirthkar

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