Four new points related to the company seal from 2021

The Law on Enterprise 2020 officially takes effect from January 1, 2021 with many new regulations compared to the previous Law on Enterprise 2014, specifically the contents related to the business seal.

1. THE LEGAL RECOGNITION OF DIGITAL SIGNATURE AS THE COMPANY SEAL.

This is a completely new content compared to the provisions of the Law on Enterprise 2014.

In fact, up to now, the company seal has existed in two forms, including:

  • The seal made at the seal engraving establishment;
  • The seal in the form of digital signature in accordance with the law on electronic transactions.

So, what are digital signatures?

Clause 6, Article 3 of Decree No. 130/2018/ND-CP specifies that:

“A digital signature is a form of electronic signature created by transforming a data message using an asymmetric cryptographic system, whereby the person who obtains the original data message and the user’s public key can accurately identifies:

  • The above transformation is created by an exact private key corresponding to the public key in the same key pair;
  • Content integrity of the data message from the time the above transformation is performed.”

To help you have a deep understanding of it, PL&Partners will give you a much simpler explanation as follows:

A digital signature is a form of electronic signature that is encrypted with data and information of a business. A digital signature has the same function as a wet signature and company seal, which is used to be signed and identified on documents and digital documents, ensuring confidentiality and safety for electronic transactions through the internet.

Businesses can use digital signatures to declare and pay taxes, social insurance online, sign electronic invoices, perform administrative procedures through the National Business Registration Portal, and electronic customs, etc.

Digital signature is gradually becoming an indispensable tool for most businesses today.

Therefore, the fact that the Law on Enterprise 2020 recognizes the digital signature as a seal is totally consistent with the popular practice of electronic transactions, which have a great contribution to helping businesses have more choices in using the seal instead of just using the engraved seal as today.

2. BUSINESSES DO NOT HAVE TO NOTIFY THE SEAL SAMPLE BEFORE USING.

According to the provisions of Clause 2, Article 44 of the Law on Enterprise 2014, before using the seal, the business is obliged to notify the seal sample to the business registration authorities for public posting on the National Business Registration Portal.

However, under the Law on Enterprise 2020, businesses will no longer need to carry out the procedures for notifying the seal sample as before.

3. BUSINESSES ARE ENTITLED TO SELF-DETERMINATION WITH THEIR SEALS.

According to Clause 1, Article 44 of the Law on Enterprise 2014, the contents of the seal must show following information:

  • Enterprise’s name;
  • Business code.

However, The Law on Enterprise 2020 does not include this regulation. Businesses are entitled to determine the type, quantity, form and content of the seal of their business, branches, representative offices and other units.

4. CHANGES RELATED TO MANAGEMENT, STORAGE AND USAGE OF THE SEAL.

The Law on Enterprise 2014 stipulates that: the management, usage and storage of the seal shall comply with the provisions of the company’s charter.

The Law on Enterprise 2020 stipulates that the management and storage of the seal must comply with the provisions of the company’s charter, or regulations by the businesses, their branch, representative office or other unit of the business that has its enforced seal.

As a result, the Law on Enterprise 2020 contributes to improve businesses’ control over their company seals. Businesses do not need to spend a lot of time and effort to carry out the procedures as before. However, a question is what are things that businesses need to do in order to ensure the legality of the seal? Please read our next article for the answer.

The above article is about Four new points related to the business seals from January 1, 2021 of PL&Partners Law Firm. If you have any inquiries, please don’t hesitate to contact us for further information:

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