Signing of accounts by md

622 views 4 replies

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3489 Points Joined June 2011

Pursuant to Section 215(1) Managing Director must be a signatory to Balance Sheet where there is a MD in a company. BUt what is the intention behind this ? What would be the consequences if the financial statements are signed by 2 Directors as the MD happens to be a foreign national and not in India.

Will it be so that if he does not sign, he will not be liable for any misstatements etc.

The section does not impose any fine or penalty -- to be noted.

Please provide your views.

Regards,

Replies (4)

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3489 Points Joined June 2011

Any views, please.

Guest

Dear Dipjyoti,

Infact, Section 218 provides for penalty for non-compliance with the provisions of Sections 212, 215, 216 and 217. Thus, the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. 5000 if any copy of balance sheet or Profit and loss account is, without being signed as required by Section 215, issued, circulated or published.

Thus, anyway you will have to comply with these provisions instead of delving deeper into the reasons for framing such kind of compliance.

Why don't you send the Balance sheet & P&l A/C to the MD based in foreign, by post for his necessary signature ? MD is a topmost exec of a company, thus his signature on above important documents is provided by law.

Regards,

Veeral Gandhi

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3489 Points Joined June 2011

Veeral

The problem is the MD is a foreign national. He cannot come to India, where the BM is to be held for approval of accounts. Suppose the Bm is held in India where the remaining directors and auditor signs it. How can I show the places of signing by director and Md to be different ?

Please provide some clue.

Regards,