The Financial Statement is a crucial document prepared annually and audited by the company's auditors. It provides an overview of the company's assets, liabilities, and shareholders' equity, giving shareholders insight into the company's financial position and operations. The statement includes the balance sheet, profit/loss account (or income/expenditure account for nonprofits), cash flow statement, statement of changes in equity (if applicable), and annexure. This information helps shareholders make investment decisions. (As per Section 2(40) of the Companies Act 2013).
Who can sign the financial statements as per the Companies Act 2013?
As per the Companies Act 2013, the financial statements of a company must be signed by the following individuals:
- Chairperson of the Company (if authorized by the board of directors) - The Chairperson can sign the financial statements if the board of directors has given them the authority to do so, regardless of whether they chaired the meeting or not.
- Two Directors (out of which one must be the Managing Director) - In the absence of an authorized Chairperson, two directors of the company can sign the financial statements. One of these directors must be the Managing Director of the company.
- Chief Executive Officer (CEO)/ Company Secretary (CS)/ Chief Financial Officer (CFO) of the Company, based on their appointments in the company.
QUICK BITES
1. What should be the date of signing of the Balance sheet/ Financial statement?
Date of signing of the Balance sheet shall be any date on or after the date of Board Meeting in which the Financial Statement are approved by the Board of Directors.
2. Whether the Auditor and the Director can sign the Financial Statements on different dates?
Financial statement shall be first sign by the Directors and then same shall be signed by the Auditors of the Company. However, date of signing of the financial statement by the directors and auditors can be different.
3. What is the due date for holding the Board Meeting for the approval of the Financial Statements?
A company is required to adopt the Financial Statement in the Annual General meeting. Due date of Annual General Meeting is 6 months from the end of the financial year i.e. 30th September. Therefore, one can opine that the due date of holding of the Board Meeting for the approval of the Financial Statement is on or before 30th September in case the financial year ends on March 31.
4. Whether the Company Secretary is required to sign the Financial statement?
Signing of the Financials by the Company Secretary: If a Company is having the Whole time Company Secretary, then it is mandatory to get the Financial Statement signed from the Company Secretary.
5. Whether the director and the auditor can sign the financial statement on different places?
Place of signing of the Financial Statement: Place of signing of the Financial statement by the Auditor and the director can be same as well as different. If both the person sign on different place.
6. Can the Additional Director sign the Balance Sheet?
Yes, the Additional Director can sign the Balance Sheet. As the additional director is having the term as a director upto the Annual General Meeting of Company.
7. Whether it is mandatory to get the Financial statement signed from CFO / CEO?
Signing of the Financials by CFO / CEO: If a Company is having CFO / CEO, then it is mandatory to get Financial statement signed from them as well.
8. Can one Director and Auditor sign the Financial Statement?
As per Section 134 of the Companies Act, it is mandatory that the financial statement should be signed by at least two directors.
9. Can an independent Director sign the Financial Statement?
Independent Director being a director of the Company is allowed to sign the financial statement of the Company.
10. Do the shareholders need to approve/ adopt the Financial Statement?
Once the Financial statement of the Company is signed by Directors and the Auditor, it is need to bead opted by the shareholders in the Annual General Meeting of the Company.
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