Singapore Companies Act, 1967
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What Sample Corporate Resolutions for Signing
Authority Should Include
Corporate resolutions for signing authority ensures that board's wishes are carried
out when it comes to which officers and employees possess the authority to act on
the company's behalf. These characteristics include the following:
Must be issued by the company's governing body, which is typically the
board of directors
Must include the specific date and time when the board met to pass the
resolution
Must authorize a specific person or persons by name and title
Must include the types of contracts and agreements the specific individual or
individuals can execute on behalf of the corporation
Must stipulate that the resolution is in effect as of a specific date
Furthermore, the corporate secretary or another officer of the corporation — not
the person given the signing authority — must sign the corporate resolution
certification. The resolution must also contain the exact wording of the resolution
authorized by the board. Any contracts subsequently signed by the authorized
parties must be signed with their names exactly as they are shown in the board
authorization.
Finally, the official corporation seal, must be affixed to the resolution in an
appropriate place. In the absence of a seal, the notation 'LS' can be written inside a
circle next to the secretary's signature.
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under-companies-act-2013
Key Managerial Personnel
(KMP) Under Companies Act
2013
The Companies Act, 2013 (‘Act’) mandates that certain classes
of companies have to appoint Key Managerial Personnel (KMP). KMP is a
group of people in charge of the company’s operations. They are the
decision-makers and responsible for the company’s smooth functioning.
They are employees vested with certain essential functionalities and roles.
Definition of KMP Under the
Companies Act, 2013
Section 2(51) of the Act defines Key Managerial Personnel (KMP). It states
that the KMP of a company means:
Chief Executive Officer, manager or Managing Director
Company secretary
Whole-Time Director
Chief Financial Officer
Such other officers, designated by the Board as KMP but are
not more than one level below the directors in whole-time
employment
Such other officer as may be prescribed
Chief Executive Officer, Manager or
Managing Director
The Chief Executive Officer and Managing Director are responsible for
running the company. The Managing Director has authority over all
company operations. They are also responsible for growing and innovating
the company to a larger scale.
Under the Act, the Managing Director is defined as a director having
substantial powers over the company management and its affairs. A
Managing Director is appointed through any of the following means:
By the Articles of Association
An agreement with the company
A resolution passed in a general meeting
By the company board of directors
The Act defines a manager as the individual who manages the whole
company affairs, subject to the board of directors’ direction, control and
superintendence. A manager also includes a director or a person
occupying a manager position in a company, even under a contract of
service. However, a company cannot appoint a managing director and a
manager at the same time.
Company Secretary
A company secretary is responsible for looking after the efficient
administration of the company. They take care of the company’s
compliance and regulatory requirements. They also ensure that the
instructions and targets of the board are implemented.
As per the Act, a company secretary or secretary means a company
secretary defined under Section 2 of the Company Secretaries Act, 1980.
The Company Secretaries Act defines a Company Secretary as a person
who is a member of the Institute of Company Secretaries of India (ICSI).
The company secretary should ensure that the company complies with
secretarial standards.
Whole-Time Director
Under the Act, a Whole-Time Director is defined as a director who is in
whole-time employment of the company. A Whole-Time Director means a
director who works during the entire working hours of the company. They
are different from an independent director as they are part of the daily
operation and has a significant stake in the company. A Managing Director
can also be a Whole-Time Director.
Chief Financial Officer
A Chief Financial Officer is responsible for handling the company’s financial
status. They keep a tab on cash flow operations, create contingency plans
for financial crises and do financial planning. They lead the treasury and
financial functions of the company.
Companies Required to Appoint
KMP
Section 203 of the Act provides that certain classes of companies
must appoint the KMP, which includes the Managing Director or manager or
Chief Executive Officer, company secretary and Chief Financial Officer.
The company must appoint a whole-time director if it does not have a Chief
Executive Officer, manager or Managing Director.
Rule 8 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 provides the class of companies that must appoint
the whole-time KMP, which are as follows:
Every listed company
A public company having a paid-up share capital of Rs.10 crore
or more
Further, a private company having a paid-up share capital of Rs.10 crore or
more must appoint a whole-time company secretary.
Every whole-time KMP is appointed through a resolution of the board
containing the conditions and terms of appointment, including
remuneration. A whole-time KMP must not simultaneously hold office in
more than one company except its subsidiary company.
The board is responsible for filling the vacancies in the post of KMP within
six months of the vacancy. A company can appoint or re-appoint a person
as its managing director, whole-time director or manager for a maximum of
five years.
Persons Who Cannot Be
Appointed as KMP
The Act states that a company cannot continue the employment or appoint
a managing director, whole-time director or manager when such person:
Has attained 70 years or is below 21 years
Has been convicted as an insolvent or is an uncharged insolvent
Has suspended payment to the creditors at any time
Has been convicted for an offence by a court and sentenced to
more than six months period
Role and Responsibilities of KMP
The KMPs are responsible for taking crucial company decisions and
managing the employees. They are also liable when the company does not
follow the mandatory compliances laid down by the Act. The primary
responsibilities and functions of the KMP are:
As per Section 170 of the Act, the details about the securities
held by the KMPs in the company or its subsidiaries must be
disclosed and recorded in the Register.
The KMPs have the right to state their opinion, especially in the
Audit Committee meetings, but they do not have a voting right.
As per Section 189(2) of the Act, the KMPs should disclose their
interests in other associations and companies within 30 days of
their appointment.
Penalty for Non-Appointment of
KMP
When a company does not appoint KMP as provided in the Act, the
company will be liable to pay a penalty of Rs.5 lakh, and every director and
KMP, if any, of the company in default will be liable to a penalty of
Rs.50,000. A further penalty of Rs.1,000 per day but not exceeding Rs.5
lakh will be imposed after the first day, during which such default continues.
The KMPs of the company are essential persons who look after the
management and affairs of a company. The companies specified under
Rule 8 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, must mandatorily appoint KMP for the company
management, or they will have to pay a penalty as provided under the Act.
AS PER SECTION 21 OF COMPANIES ACT, 2013[1]:
Save as otherwise provided in this Act,
a) a document or proceeding requiring authentication by a
company; or
b) contracts made by or on behalf of a company, may be
signed by any Key Managerial Personnel (“KMP”) or an
Officer or Employee of the company duly authorized by the
Board in this behalf.
AS PER SECTION 2(59) OF CA, 2013[2]:
"Officer" includes any director, manager or key
managerial personnel or any person in accordance
with whose directions or instructions the Board of Directors
or any one or more of the directors is or are accustomed to
act;
AS PER SECTION 2(51) OF CA, 2013[3]:
"KMP," in relation to a company, means:
i. the Chief Executive Officer or the managing director or
the manager;
ii. the Company Secretary;
iii. the Whole-time director;
iv. the Chief Financial Officer;
v. such other officer, not more than one level below the
directors who is in whole-time employment, designated as
KMP by the Board; and
vi. such other officer as may be prescribed;
MANNER AND CONDITIONS OF FILING:
As per the 5th proviso to Rule 7 of the Companies
(Registration Offices and Fees) Rules, 2014[4]:
Provided also that any correspondence (physically or
electronically) and documents to be filed by any person
shall contain;
name, designation, address, membership
number or Director Identification Number,
as the case may be, of the person signing such document
and make sure correctness thereof and in no case,
correspondence, merely with signature and writing
authorized signatory shall be acceptable.
AUTHENTICATION OF DOCUMENTS:
Rule 8 of The Companies (Registration Offices and
Fees) Rules, 2014[5]:
The electronic forms required to be filed under the Act or
the rules there-under shall be authenticated on behalf of
the company by the Managing Director or Director or
Secretary of the Company or other KMP.”
MCA PORTAL:
The MCA portal recognized only KMP as Director or
Manager or Chief Executive Officer or Company Secretary
or Chief Financial Officer for filing the form on MCA
but not any authorized Signatory.
PRECAUTION:
When a person who holds the position of Key Managerial
Personnel (KMP) signs a document, contract or form, they
must clearly state their actual designation. If the signatory
is an authorized officer of the Board, they should not only
mention their designation but also include a reference to
the Board resolution that grants them the authority to sign.
A certified copy of the resolution should also be attached to
the document or contract. It is not acceptable to simply use
the term "Authorized Signatory" without providing the
necessary details mentioned above.
CONCLUSION:
Director or Manager or Chief Executive Officer or Company
Secretary or Chief Financial Officer as KMP, are authorized
to sign any documents with the power of the board's
authorization.
