A court judgment or any other legal document is only valid when it is signed by the legal fraternity, without a proper sign it will be considered invalid. The same situation arises in the corporate world, as there are so many documents that should be authorized on behalf of the company. For example- the audit report of any particular company should be signed by a Chartered Accountant (CA). He is the only authorized person to work the same. There are two things which are involved in this particular section: the person has the authority to do the same and he/she should sign the documents. As per section 21 of the Companies Act 2013 the proceedings, documents, and contracts should be signed by the key managerial personnel or a person authorized by the board of directors of a company. Therefore, any document concerned and related to the company should be signed by the authorized person.
Section 21: Authentication of documents, proceedings, and contracts.
Save as otherwise provided in this Act,-
(a) A document or proceedings requiring authentication by a company; or
(b) Contracts made by or on behalf of a company; or
May be signed by any key managerial personnel or [an officer or employee of the company] duly authorized by the Board on this behalf.
As per section 2 (51) key managerial personnel, in relation to a company means-
1. The CEO or the MD or manager of the company;
2. The company secretary of the company;
3. The whole time director;
4. The CFO;
5. Such other officer, not more than one level below the director who is a whole- time employment designated as key managerial personnel by the board; and
6. Such other officers may be prescribed.
Authentication speaks to the genuineness of the signature of a public official found on a document. In other countries authentication is also known as an apostille. Companies Act 2013 and Companies( Registration Offices and Fees ) Rules, 2014 state that documents need to be authorized by individuals or professionals, depending on the documents. authorized
An electronic form can be authenticated with a digital signature if the digital signature has been signed by someone authorized to do so. Thus, a singular person can be authorized to do so, this can be any director authorized through a meeting and subsequently by passing a resolution. This authorization of the director should ideally be done during the first board meeting of the financial year, and while signing any such electronic forms, the director will have to mention the authorization number and the setting of the passing of the resolution which has authorized him to sign the form. Moreover, the director or any other person who has been authorized to sign such forms is generally authorized for the whole of the year, and therefore, it is better to pass such a resolution at the first board meeting of the financial year. The person who is signing a document, while filing a document through the portal of the central government or registrar is to contain the name, address, designation, membership number, or director identification number.
If there is a form related to a change in secretaries, or directors of the company, the appointment form of the secretary or the director has to be filed by a continuing director, this can be anyone in case the appointment is of a director or secretary, or the secretary of the company also referred to as the company secretary if the appointment is of a director. Secretary means the company secretary under the Companies Act, 2013, and their job is to ensure that the company is complying with all relevant legislation and regulations, and ensure that the board members are informed of all their legal responsibilities towards the company. Whenever there is a re-appointment, appointment, or change of director, then the same can be signed by the company secretary or a continuing director; if it is a reappointment. Director, then the continuing director needs to be other than the one who is being reappointed. If there is a change in the company secretary, whether it is a reappointment, appointment, or change then it needs to be signed by a continuing director.
Whether it is an authorized signatory or a professional who is responsible for signing the electronic form, it is their responsibility to ensure the correctness of the contents of the electronic form and all enclosures attached to the electronic form. A single mistake on their part can lead to penalties under the act and also a detriment to any contracts or arrangements being entered into through the form. Therefore, they need to be very careful with their work.
All people who have been authorized to authenticate any electronic forms, applications, documents, and so on, which are to be delivered or filed under the Companies Act, 2013 or any rules related to the Companies Act, 2013, the authorized persons are responsible for attaining a digital signature certificate (DSC) from the certifying authority, allowing them to sign such documents. It authorizes their signatures, but the certificate needs to be at least CLASS II or class III under the Information Technology Act, of 2000. The digital signature certificate helps to prove someone’s identity, sign certain documents, and access information or services on the net. Class II DSC is used to file documents with the registrar of companies, MCA forms, income tax returns, audit reports, and so on. Class III DSC is where the registration authority verifies the identity of the person, and these are required for fields where there is a high chance of fraud risks, high-value transactions, or threats to data.
The electronic form which needs to be filed under the Companies Act, 2013 or any of the relevant rules related to companies, is to be authenticated on behalf of the company by a director, secretary of the company, managing director, or any other key managerial personnel. Key managerial personnel includes, the chief executive officer or the managing director or the manager of the company; any whole-time director; the company secretary; the chief financial officer; and any other prescribed officer.
If the document has been scanned, then the scanned image of the document should be of the original signed documents which are relevant to the electronic form, documents, and so on. The scanned document should not be without the signature of the authorized person. All such documents should be clear and visible, without any blank papers. No scanned sign should have been used. The document should have been originally signed and then scanned.
It is the sole responsibility of the authorized person, whether an officer of the company or a hired professional, responsible for signing the forms to ensure that all the required attachments which are relevant to the form have been attached properly and are completely legible, and are following all relevant guidelines of the document as stipulated in the Companies Act, 2013 and other relevant rules applicable to companies. They should also ensure that there has been no omission of facts.
The documents, application, or form can contain a power of attorney which has been issued to a professional, such as a chartered accountant, advocate, cost accountant or company secretary in whole-time practice or any other person supported by the board of directors and is approved by a resolution to make representation on behalf of the company, as an approving or registering authority. If they fail to fulfill their duties, or the company does not pass a resolution, or power of attorney is not given, then key managerial personnel or directors can make the representation.
Suppose any misleading information has been filed or there has been an omission in filing a document, application, or return. In that case, the person can be held liable under section 448 or 449 of the Companies Act, 2013. Moreover, the central government will also deactivate the DSC until a final decision about the matter has been adjudicated. Certain forms need to be pre-certified by the company secretary, chartered accountant, or cost accountant in whole-time practice. Anyone who provides false information to the registrar of companies on behalf of the company is liable to be prosecuted under section 448 of the Companies Act, 2013. However, for a case to be brought under section 448 there needs to be a clear record as to fraud or suppression, or omission of material facts. If any person intentionally provides false information, then they can be held liable under section 449 of the Companies Act, 2013.
The government is responsible for maintaining a website or portal for filing electronic forms, applications, or documents for viewing and inspection, or for obtaining certified copies whenever necessary. Authentication of documents, proceedings, and contracts is a very important task, which if not undertaken properly can put the entire company in jeopardy, moreover, it can put the person in charge in trouble with the government as well. Therefore, these positions generally go to the key managerial positions or other professionals vetted by a board resolution, as this job requires application of mind as well as a high amount of responsibility and discretion.
So, the documents related to the proceedings and contracts of the company should be signed and authorized by the person concerned and key managerial personnel. These persons are generally authorized by the board of directors. . There are two things which are involved in this particular section: the person has the authority to do the same and he/she should sign the documents. As per section 21 of the Companies Act 2013.
section 21 of the Companies Act 2013
Law students often face problems, which they cannot share with their friends and families. We have started a column on our website Student’s Corner. In this column we are talking to several law students about the challenges that they face. Students who are interested in participating in the same, can fill this Google Form.
IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.
We do conduct several Courses, Quizs and Webinars, Click here to register
The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.
If you would also like to contribute to my website, then do share your articles or poems at firstname.lastname@example.org
Join our Whatsapp group for Legal Job Openings