Signing of Financial Statements under Companies Act 2013
This query is : Resolved
01 June 2020
This question dates back to the year 2015.
A PVT ltd company in India has 3 directors of which 2 - Mr A & Mr B are foreigners (Mr A is Chairman of the Company) and are at one place only and 1 Mr C is staying in India. It has also appointed a full time Company Secretary Mr D.
On 25th September 2015, Company realised that Financials are to be signed and none of the foreign directors could travel to India and vice-versa.
So, what various options are available to comply with the provisions of section 134 related to signing of Financial Statements by the Company? to be specific with below questions:
the procedures to be followed to comply with section 134, 101, etc as in, in the given conditions -
1) how, where and when to schedule BM for approval of Accounts (certainly with a shorter notice)?
2) who can sign the approved financials & when?
3) how & when to schedule AGM (certainly with a shorter notice and considering Circular 11/2015)
A PVT ltd company in India has 3 directors of which 2 - Mr A & Mr B are foreigners (Mr A is Chairman of the Company) and are at one place only and 1 Mr C is staying in India. It has also appointed a full time Company Secretary Mr D.
On 25th September 2015, Company realised that Financials are to be signed and none of the foreign directors could travel to India and vice-versa.
So, what various options are available to comply with the provisions of section 134 related to signing of Financial Statements by the Company? to be specific with below questions:
the procedures to be followed to comply with section 134, 101, etc as in, in the given conditions -
1) how, where and when to schedule BM for approval of Accounts (certainly with a shorter notice)?
2) who can sign the approved financials & when?
3) how & when to schedule AGM (certainly with a shorter notice and considering Circular 11/2015)
02 June 2020
for approval of accounts, board approval is required and meeting through video conferencing is also not allowed for this agenda item. one of the director must come to attend the meeting and form the quorum.
02 June 2020
Thanks for your time. can you plz answer every question?
25 July 2025
This is a practical and important issue—signing and approving financial statements when key directors are abroad and need to comply with Sections 134, 101, and related provisions of the Companies Act, 2013, plus MCA circulars. Here’s a detailed approach tailored to your scenario from 2015:
---
### Background
* Pvt Ltd Company with 3 directors: 2 foreign (Mr. A - Chairman, Mr. B), and 1 Indian (Mr. C).
* Company Secretary (Mr. D) present in India.
* Financial statements need approval and signing.
* Foreign directors cannot travel to India.
* Company wants to comply with legal provisions for Board Meeting (BM), signing, and Annual General Meeting (AGM) with short notice.
---
## 1) How, Where, and When to Schedule the Board Meeting (BM) for Approval of Accounts (Short Notice)?
### Key legal provisions:
* **Section 101** of Companies Act, 2013 permits shorter notice for Board meetings if **at least one director gives consent in writing**.
* **Section 173** allows meetings via **video conferencing or other audio-visual means**.
* **MCA Circular 11/2015 (dated 24th April 2015)** allows conduct of Board/General meetings through video conferencing or other audio-visual means, **valid till 30th June 2016**.
### Procedure:
* **Schedule a Board Meeting by giving shorter notice**, minimum 7 days preferred, but can be shorter if all directors consent.
* **Hold the meeting through video conferencing** allowing all directors, including foreign directors, to participate remotely.
* The venue of the meeting can be considered as the **registered office** or any place within India, but since the meeting is virtual, location is flexible.
* **Send agenda and papers (financials) electronically** well in advance.
---
## 2) Who Can Sign the Approved Financial Statements & When?
### Section 134(1) Requirements:
* Financial statements must be signed by:
* **Chairman of the company (if authorized) OR**
* **Managing Director OR**
* **One director** (authorized by the Board)
* Additionally, the **Company Secretary (if appointed)** must also sign the financial statements.
### In your case:
* Mr. A (Chairman, foreign, attending virtually) can sign.
* If the Chairman authorizes Mr. C (Indian director) or Company Secretary Mr. D, they may sign as per Board resolution.
* Since the meeting is virtual, signatures can be:
* **Physical signatures after the meeting**, or
* **Digital Signatures (DSC)** are legally valid under the IT Act and accepted by MCA.
### Timing:
* Signing is done **after approval at the Board Meeting**.
* Directors and Company Secretary can sign on the **same day or shortly thereafter**.
* Digital signatures speed up this process, especially for foreign directors.
---
## 3) How & When to Schedule the AGM (With Short Notice Considering Circular 11/2015)?
### Legal Provisions & Circulars:
* **Section 99** and **Section 101** govern the notice period for general meetings.
* Normally, AGM requires **21 clear days’ notice**.
* MCA Circular 11/2015 permits conduct of **General Meetings through video conferencing/audio-visual means**, allowing virtual participation.
* Circular also allowed certain relaxations during the period (subject to specific conditions).
### Procedure:
* Schedule the AGM with **notice period as per Companies Act or shorter if all members consent**.
* Conduct the AGM **through video conferencing** to allow participation of foreign directors and shareholders.
* Ensure the **statutory auditors’ report and signed financials** are ready and circulated before the meeting.
* **Company Secretary to send digital notice** to members/directors.
* AGM can be held remotely, **anytime within the statutory timelines** (i.e., within 6 months from financial year end and not exceeding 15 months from previous AGM).
---
## Summary Table
| Activity | Legal Provision | Practical Steps |
| ---------------------------- | -------------------------------------- | ----------------------------------------------------------------------------------------------- |
| Board Meeting (BM) | Sec 101, Sec 173, MCA Circular 11/2015 | Short notice with all consent, hold via video conferencing, share documents electronically |
| Signing Financials | Sec 134(1) | Chairman/MD/authorized director + Company Secretary sign physically or digitally after BM |
| Annual General Meeting (AGM) | Sec 99, Sec 101, MCA Circular 11/2015 | Issue notice (min 21 days or shorter if consent), conduct virtually, ensure all docs circulated |
---
### Additional Recommendations:
* Use **Digital Signatures (DSC)** for all signatories to avoid postal delays.
* Pass **Board Resolutions** authorizing signatories and approving virtual meetings.
* Maintain detailed **minutes of meetings** documenting virtual participation.
* Keep copies of **MCA circulars** as supporting compliance documents.
---
If you want, I can help draft:
* Notice templates for virtual BM and AGM.
* Board resolutions authorizing signatories.
* Minutes template for virtual meetings.
Would you like me to prepare these for you?
---
### Background
* Pvt Ltd Company with 3 directors: 2 foreign (Mr. A - Chairman, Mr. B), and 1 Indian (Mr. C).
* Company Secretary (Mr. D) present in India.
* Financial statements need approval and signing.
* Foreign directors cannot travel to India.
* Company wants to comply with legal provisions for Board Meeting (BM), signing, and Annual General Meeting (AGM) with short notice.
---
## 1) How, Where, and When to Schedule the Board Meeting (BM) for Approval of Accounts (Short Notice)?
### Key legal provisions:
* **Section 101** of Companies Act, 2013 permits shorter notice for Board meetings if **at least one director gives consent in writing**.
* **Section 173** allows meetings via **video conferencing or other audio-visual means**.
* **MCA Circular 11/2015 (dated 24th April 2015)** allows conduct of Board/General meetings through video conferencing or other audio-visual means, **valid till 30th June 2016**.
### Procedure:
* **Schedule a Board Meeting by giving shorter notice**, minimum 7 days preferred, but can be shorter if all directors consent.
* **Hold the meeting through video conferencing** allowing all directors, including foreign directors, to participate remotely.
* The venue of the meeting can be considered as the **registered office** or any place within India, but since the meeting is virtual, location is flexible.
* **Send agenda and papers (financials) electronically** well in advance.
---
## 2) Who Can Sign the Approved Financial Statements & When?
### Section 134(1) Requirements:
* Financial statements must be signed by:
* **Chairman of the company (if authorized) OR**
* **Managing Director OR**
* **One director** (authorized by the Board)
* Additionally, the **Company Secretary (if appointed)** must also sign the financial statements.
### In your case:
* Mr. A (Chairman, foreign, attending virtually) can sign.
* If the Chairman authorizes Mr. C (Indian director) or Company Secretary Mr. D, they may sign as per Board resolution.
* Since the meeting is virtual, signatures can be:
* **Physical signatures after the meeting**, or
* **Digital Signatures (DSC)** are legally valid under the IT Act and accepted by MCA.
### Timing:
* Signing is done **after approval at the Board Meeting**.
* Directors and Company Secretary can sign on the **same day or shortly thereafter**.
* Digital signatures speed up this process, especially for foreign directors.
---
## 3) How & When to Schedule the AGM (With Short Notice Considering Circular 11/2015)?
### Legal Provisions & Circulars:
* **Section 99** and **Section 101** govern the notice period for general meetings.
* Normally, AGM requires **21 clear days’ notice**.
* MCA Circular 11/2015 permits conduct of **General Meetings through video conferencing/audio-visual means**, allowing virtual participation.
* Circular also allowed certain relaxations during the period (subject to specific conditions).
### Procedure:
* Schedule the AGM with **notice period as per Companies Act or shorter if all members consent**.
* Conduct the AGM **through video conferencing** to allow participation of foreign directors and shareholders.
* Ensure the **statutory auditors’ report and signed financials** are ready and circulated before the meeting.
* **Company Secretary to send digital notice** to members/directors.
* AGM can be held remotely, **anytime within the statutory timelines** (i.e., within 6 months from financial year end and not exceeding 15 months from previous AGM).
---
## Summary Table
| Activity | Legal Provision | Practical Steps |
| ---------------------------- | -------------------------------------- | ----------------------------------------------------------------------------------------------- |
| Board Meeting (BM) | Sec 101, Sec 173, MCA Circular 11/2015 | Short notice with all consent, hold via video conferencing, share documents electronically |
| Signing Financials | Sec 134(1) | Chairman/MD/authorized director + Company Secretary sign physically or digitally after BM |
| Annual General Meeting (AGM) | Sec 99, Sec 101, MCA Circular 11/2015 | Issue notice (min 21 days or shorter if consent), conduct virtually, ensure all docs circulated |
---
### Additional Recommendations:
* Use **Digital Signatures (DSC)** for all signatories to avoid postal delays.
* Pass **Board Resolutions** authorizing signatories and approving virtual meetings.
* Maintain detailed **minutes of meetings** documenting virtual participation.
* Keep copies of **MCA circulars** as supporting compliance documents.
---
If you want, I can help draft:
* Notice templates for virtual BM and AGM.
* Board resolutions authorizing signatories.
* Minutes template for virtual meetings.
Would you like me to prepare these for you?
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