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Section 215 - MD a signatory

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)

15 June 2011

Friends

A person is appointed as MD in May 2011. Section 215 mandates that MD needs to be a signatory to accounts. His contention is that he was not associated with the company from 1/4/10 till 31/3/11.

What is to be done

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10 Replies

Manish Mishra (CS) (36 Points)
Replied 15 June 2011

The process should be read in sense with its intention, MD is sining on behalf of the Board the same Board which approved the Financials. If he was an MD in that meeting it is his obligation to sign it on behalf of the Baord.

Therefore inany case he needs to sign the financials.

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 15 June 2011

Hello,

Section 215 clearly says that the balance sheet and profit & loss accounts are required to be signed by the Managing Director if there is one. Therefore, the board meeting in which the accounts are approved and signed if there is a Managing Director than he should sign the same on behalf of the Board irrespective of the fact as to whether he was there as such during the period to which the accounts relate or not.

Regards

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 15 June 2011

Originally posted by : Vaibhav Shukla
	Hello, Section 215 clearly says that the balance sheet and profit & loss accounts are required to be signed by the Managing Director if there is one. Therefore, the board meeting in which the accounts are approved and signed if there is a Managing Director than he should sign the same on behalf of the Board irrespective of the fact as to whether he was there as such during the period to which the accounts relate or not. Regards

agreed

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 16 June 2011

I endorse the View of Vaibhav....

The date of signing is the date on which the Balance Sheet is approved and if on that date the person is there he has to sing the balance sheet and the same is applicable to Director/ MD / Secretary.

lokesh maheshwari (partner) (62 Points)
Replied 16 June 2011

i agree with mr vaibhav

CA Suraj Prasad Shaw (Chartered Accountant) (504 Points)
Replied 16 June 2011

Agree with Vaibhav Sir & Ankur Sir.

Rajnikant Vadigoppula (CA, CS And CMA Final) (919 Points)
Replied 16 June 2011

yes i agree with vaibav and ankur

CS Bijoy (Expert) (6394 Points)
Replied 16 June 2011

Agree with the senior...bt I have a little doubt that is section 283 which says if any director absence from three consecutive meeting or from all during the three month without proper permission than he will be removed from his office.

In this regard I think He can not sign the same because He is not related with the company for one year.

Other views for correction are expected........

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 16 June 2011

Dear Bijoy Ji, As i clearly said that if he is the director as on the date of meeting he can sign. He he ceased to be a director, then the question of signing by him was not arose.

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 16 June 2011

Dear Bijoy,

Section 283 is applicable when a person being a director is absent from three consecutive meetings of the Board of Directors in his capacity as a Director, whereas as per the query the contention of the person appointed as MD is that he was not associated with the company during the financial year to which the accounts relate thus he is not required to sign the same. Since he has been appointed as an MD in May 2011 therefore the question of his missing the three consecutive board meetings does not even arise here. Had he missed the meetings after his appointment as such then only he would have been liable to vacate his office under section 283.

Regards