Does your Charity need a Common Seal?
Have you just set up a charitable trust? It’s a common misconception that a “common seal” is outdated and not needed – but it is essential that you obtain a common seal as it is legally required. This article explains what a common seal is and how your trustees can obtain one.
A common seal is how a board of trustees can execute documents. Section 13 of the Charitable Trusts Act 1957 states it is required: “Every board shall have perpetual succession and a common seal…”. It is normally a rubber stamp that must include the name of the trust and the term ‘common seal’. You can purchase a common seal from providers such as this one. The charitable trust deed should have a provision that deals with the use of the common seal. For example:
The Board shall have a common seal (the Common Seal) which shall be kept in the custody of the secretary (or such other officer as shall be appointed by the Board) and which shall be used only by authority of the Trustees previously given to any document requiring execution under Common Seal by the Trustees. Each such use of the seal shall be performed in the presence of and accompanied by the signatures of at least two Trustees and shall be sufficient evidence of the authority to use such seal. No person dealing with the Trustees shall be bound or concerned to see or enquire as to the authority under which any document is sealed and in whose presence it was sealed. You can order a common seal from places like this: https://shop.montarga.co.nz/collections/common-seal
To learn about what other steps you should take after you have set up a charitable trust, see our practical checklist here.
We hope that this article will be of use to you as you start on the journey of establishing a charity. Please feel free to contact Steven Moe at stevenmoe@parryfield.com or 021 761 292 should you require assistance – we have a lot of free resources for start-ups, including “Start-ups Legal Toolkit” which covers the key issues we see people face when starting out (it’s a free PDF guide in the resources section of this site).
Photo credit to Kris Morrison and Sarah Wilson at Parry Field Lawyers.
