What it means
For centuries, important agreements were made binding by pressing a personal seal into wax. The phrase locus sigilli marked the spot where that seal went, and the abbreviation was printed or written in a circle or box on the page.
A seal showed that the signer had approved the document and intended to be bound. The seal mattered in law because a document executed under seal, called a deed, was treated as especially solemn.
In many legal systems, a deed could be enforced even when no payment had changed hands, and it often had a longer time limit for legal claims than an ordinary contract. For finance professionals, this explains why mortgages, guarantees and powers of attorney are still often signed as deeds.
Modern practice has moved on. In many places a physical seal is no longer needed, and a deed can be signed and witnessed by following the rules of that country, sometimes electronically.
The L.S. mark often remains as a printed tradition on forms, and some documents still include a small circle or the letters in the signature block. The mark also appears on official papers, such as notarial certificates, bond certificates and company share certificates, where a corporate seal may be shown.
Where a company has a seal, the document may state that it was signed in the presence of the company's officers and sealed with the common seal. Whether a seal is required depends on the law of the place and the type of document.
Anyone dealing with such paperwork should check the execution requirements with a lawyer in the relevant country. This entry gives general background only, and it is not legal advice.
In practice the lesson is about authority and formality. Before signing a deed, check who is allowed to sign for the company, whether witnesses are needed and whether the document must be dated and delivered.
A document that fails these steps may not bind the company, even if it carries all the right marks.
In practice
Real-world examples.
Example
A bank prepares a guarantee in which a company director promises to repay a $500,000 loan if the borrower defaults. The document is signed as a deed, with the letters L.S. printed beside the signature line. The bank's lawyer checks that the director's signature was witnessed as the law requires. Without correct witnessing, the bank could struggle to enforce the guarantee later.
Example
A property buyer signs a transfer of a building. The older form still includes a small circle marked L.S. next to each signature. The solicitor explains that the circle is traditional and the signature and witnessing are what make the document valid. She files a copy with the title documents.
Example
A family company issues a share certificate for 10,000 shares. The certificate shows the company seal and the officers' signatures, with a printed mark for the seal. The company secretary records the certificate number in the register of members. The shareholder keeps the certificate as proof of ownership.
Case study
Seen in the real world.
Ashgrove Estates Ltd is an illustrative, fictional property company that bought a warehouse for $2,800,000 using a bank loan. The loan documents included a mortgage deed with the letters L.S. printed beside each signature block.
During the closing meeting, the company's finance manager asked whether she needed to press a physical seal onto the page. The bank's solicitor explained that the law in that country no longer required a physical seal for the company, but that the deed still had to be signed by authorised officers and witnessed correctly.
The documents were signed that afternoon, and the lender released the funds the next day. The finance manager afterwards added a short checklist to the company's procedures covering who may sign deeds and how witnesses are recorded. The illustrative story shows that the symbol is old, but the execution rules still matter. A rejected deed would have delayed the purchase by weeks and cost extra legal fees.
Watch out
Common mistakes.
- Assuming the L.S. mark is meaningless decoration, when it may signal that the document is intended to be executed as a deed.
- Believing a physical seal is always required, when many countries have replaced it with signing and witnessing rules.
- Signing a deed without checking who is allowed to sign for a company, which can make the document challengeable.
Questions
People also ask.
What does locus sigilli mean?
It is Latin for the place of the seal, and it marks where a seal should be placed on a document.
Is a seal still legally necessary?
It depends on the country and the document, as many places have abolished the requirement for a physical seal but still require formal execution.
Why does it matter in finance?
Loan guarantees, mortgages and powers of attorney are often executed as deeds, so correct execution protects the lender and the borrower.
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