California Real Estate Practice Exam

A corporation "seal" is evidence of:

1. Authority of persons using the "seal."

2. Proof of office of the presidency

3. Rights and privileges of recipient of document with "seal."

4. None of above

The correct answer is: Authority of persons using the "seal."

The correct answer relates to the concept of authority in a corporate context. A corporation's seal acts as a formal symbol that signifies the corporation's identity and authenticity. When a document carries the corporate seal, it indicates that the individuals who applied the seal were authorized to act on behalf of the corporation in that particular matter. This seal is a critical part of the corporation's formal proceedings, as it helps verify that the document is legitimate and has been executed in accordance with the company's bylaws or resolutions. The other options do not accurately reflect the core function of a corporate seal. For instance, while it may indirectly be related to the office of the presidency within the corporation, the seal itself does not serve as direct proof of that office. Similarly, the rights and privileges of the recipient are not determined solely by the presence of the seal, as it primarily pertains to the authority and legitimacy of the corporate actions being taken. Thus, the seal is fundamentally about representing authorized actions of the corporation rather than providing proof of any other aspect.