An authorised signatory is a person formally empowered to sign documents, execute contracts and carry out transactions on behalf of a company. Because a company is an artificial legal person, it can only act through the individuals it authorises. That authority does not come from a job title alone; it flows from a decision of the Board of Directors and is exercised within the limits the Board sets.
What the law says
Under Section 21 of the Companies Act, 2013, any document or proceeding requiring authentication by a company, and any contract made on its behalf, may be signed by a Key Managerial Personnel (KMP) or by an officer or employee duly authorised by the Board. KMP, defined in Section 2(51), covers the Managing Director, CEO, whole-time director, manager, Company Secretary and CFO. Anyone outside this group needs an express Board authorisation to bind the company.
Who can be an authorised signatory
- Managing Director or CEO
- Whole-time or executive director
- Company Secretary (a KMP for prescribed companies)
- CFO or an authorised finance officer
- Manager or a designated officer/employee named in the resolution
How the authority is granted
The standard instrument is a Board Resolution passed at a duly convened board meeting. Several key powers, such as borrowing money or investing funds, can only be delegated by resolution under Section 179(3). A well-drafted resolution names the person, states the exact scope of authority, fixes any monetary ceiling, and records a specimen signature. It should also state whether the person can act singly or whether joint authorisation (two signatures) is required for higher-value transactions.
Where authorisation matters
Banks will not open or operate a current account without a Board Resolution naming the operators, their signing powers and transaction limits, backed by specimen signatures. On the GST portal, at least one primary authorised signatory is mandatory and up to ten can be added; companies and LLPs must sign using a Digital Signature Certificate (DSC), while other entities may use EVC or Aadhaar OTP. The table below summarises the main contexts.
| Context | Authorising document | Verification / mode |
|---|---|---|
| Company bank account | Board Resolution specifying signatories and limits | Wet signature / net-banking mandate |
| MCA / ROC filings | Digital Signature Certificate of the signatory | Class 3 DSC on the MCA portal |
| GST registration & returns | Authorised signatory added under Rule 26, CGST Rules 2017 | DSC for companies/LLPs; EVC/Aadhaar OTP for others |
| Contracts & agreements | Board Resolution or Power of Attorney | Signature with company seal, if any |
Common mistakes and tips
- Relying on designation alone. If the person is not a KMP, always pass a specific Board Resolution.
- Leaving scope open-ended. Define the purpose, value limit and duration clearly.
- Forgetting to revoke. When a signatory resigns or changes role, the Board must pass a fresh resolution withdrawing authority and inform the bank, MCA and GST portal.
- Not updating records. Refresh the authorised signatory on the GST portal and the bank mandate promptly to avoid rejected filings or blocked payments.