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signing of cheque by non-office bearer

anand (Administrative officer) (185 Points)

14 July 2010

A private limited company 'A' has three directors. The company wants to give authority by passing a board resolution to a non-office bearer for signing all cheques for indefinite time since the directors are situated far away and it is difficult to get their signatures everytime and almost everyday many cheques are to be issued.

Can this be done?

thanks in advance

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7 Replies

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 14 July 2010

Ofcourse, The directors may authorise any senior employee of the company to sign the cheques on the behalf of Company.

vivek (CS) (751 Points)
Replied 14 July 2010

agree, even it is the practice by the companies to authorise senior and responsible officers to sign th the cheques.

anand (Administrative officer) (185 Points)
Replied 14 July 2010

Originally posted by : vivek
	agree, even it is the practice by the companies to authorise senior and responsible officers to sign th the cheques.

Thank you Mr Ankur and Mr Vivek i got this point. thanks.

But in one case, the board of directors of a privale limited company who are all relatives from one family, want to give authority to their another family member who is not the office bearer of the company. The board does not want to give authority to it's senior officers/managers to sign cheques since they do not have faith in them but they want to authorize their relative to sign each and every cheque through out the year.

Is this possible?

thanks.

vivek (CS) (751 Points)
Replied 14 July 2010

Board is utmost powerful to delegate it's power to anyone but bank may ask for his relation beacuse he is neither the director of the company nor the employee, so it would be better to appoint the said gentelman as DIrector or employee, that decision will be prudent one.

By the way the said Gentelman should get some amount (reward) for taking the risk as you are aware under NI Act he will become directly responsible.

Others views solicited.

Regards,

Yogesh Bhatt (Company Secretary) (475 Points)
Replied 14 July 2010

Dear Anand.

Pls go through this discussion.

/forum/authority-to-the-outsiders-89204.asp?1=1&offset=1

Regards.

danish dabir (mumbai) (218 Points)
Replied 15 July 2010

The directors may authorise any senior employee of the company to sign the cheques on the behalf of Company...but the director is also liable for any frauds and errors done by an senior employee if any if the director gives any authority to any senior employee to sign on the company cheques then all the cheques signed by senior employee is on behalf of director....