section 21 of the Companies Act, 2013

Section 21 of Companies Act 2013 which has been notified says that document or proceeding requiring authentication by a company or contracts made by or on behalf of the company may be signed by any Key Managerial Personnel or any officer of the company “duly authorised by the Board in this regard”. 

The previous 54 of the Companies Act 1956 did not talk about Board authorisation. So this probably means that each company will have to pass an omnibus resolution at its Board of Directors authorising each of its identified Key Managerial Personnel to sign a specific set of documents/ contracts etc.  What will happen to the existing Power of Attorneys given to the Managing Directors.  The Managing Directors and Executive Directors always had some inherent powers by virtue of their holding the position of directorship in the company to sign certain documents or contracts on behalf of the company. 

9 Comments

Filed under company law

9 responses to “section 21 of the Companies Act, 2013

  1. Mahendra

    I think the delegation of power which was done by Board under Section 54 of the Act of 1956 has been substituted with a direct delegation of power by the Act of 2013 which means KMPs only will sign documents for the Company. Other than KMPs, there would be need of specific authorization by the Board.

  2. chintan shah

    I agree with Mahenda only officers other than KMP needs to be authorised by Board.

    • Roopesh

      Agreed. In my opinion, in case of KMP we need not require specific POA/ Board Resoution for entering into contract on behalf of the company.

  3. hetal

    Does this mean that a POA holder cannot delegate his power to execute the documents to any officer of the Company? Alternatively does this imply that only direct authorisations by the board are necessary for any contracts to be signed?

  4. Neeraj

    Does this also mean that independent consultants etc can not be authorised by the board to file applications for obtaining permissions etc

  5. Shilpi

    You statement above “The Managing Directors and Executive Directors always had some inherent powers by virtue of their holding the position of directorship in the company to sign certain documents or contracts on behalf of the company” .

    Could you help me with the Specific Section of the Companies Act in this regards.

  6. Ronak Goyal

    want to incorporate an subsidiary Company (Private Limited) with holding company will be having majority shares in it.
    While company forming we have to appoint Authorize Representative of Holding company who will act on behalf of Company, So can we appoint anyone as Representative or the person has to be Director or Employee of the Holding Company ?
    Can you Please guide us on it.

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