Signing of Financial Statement (Section 134) CEO to sign mandatory By ACS Prem Munjal

I hope the heading of the article is quite clear. Yes, in the recent amendment notified from 31st July 2018 under section 134 of the Companies Act 2013, the CEO of the Company has been held also mandatory to sign the financial statements including the consolidated statement of the Company.

In the earlier, he has to sign such statements if he also the Director of the Company along with one other person be the Managing Director of the Company. 

However, in many cases, the Company has not appointed their CEO as Director of the Company in order to avoid his signing, whereas now onwards may be in the viewpoint of Legislatures, the CEO holds utmost importance and to seek his signature may repose a confidence among the investor and also helps to authenticate the statements.

Therefore, in the amendment, the CEO either designated or not as the Director shall also sign the financial statement of the Company along with other mandatory signatories including Company Secretary, CFO.

In nutshell, the following persons have now been identified, post-amendment, as the mandatory signatories to the financial statements:

  1. The chairperson or Two Directors including one shall be Managing Director, and
  2. CEO, and Company Secretary, and CFO
Accordingly, the standard operating procedure now onwards for filing the financial statement with the ROC shall be as under:

  1. To convene Board meeting viz. authorize Chairperson, seeking signing on financial statements.
  2. To send financial statements to the statutory auditor for his report.
  3. To ensure the Company has received the above report.
  4. To issue notice/ shorter notice for the general meeting/ AGM
  5. To convene general meeting/ AGM
  6. To seek approval from shareholders
  7. To file statements with the ROC in e-form AOC /AOC4 – CFS/ AOC 4 – XBRL
I hope the article has helped you to gain the knowledge on the concept.

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  • I have a private company and there is Chairperson in the company. Can I take the sign of Only Chairperson in the financial statements? 

    thanks in advance

    17-10-2019 / 12:03:10 PM