06 August 2010
A Pvt Co has 2 Directors; 1 of the Directors is reluctant to sign the Balance Sheet, Profit Loss etc. No personal rivalry but has some suspicion on the figures.
06 August 2010
The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable law and regulations.
According to Section 215(1) Save as provided by sub-section (2), every balance sheet and every profit and loss account of a company shall be signed on behalf of the Board of directors- (i) in the case of banking company, by the persons specified in clause (a) or clause (b), as the case may be, of sub-section (2) of section 29 of the Banking Companies Act, 1949 (10 of 1949);
(ii) in the case of any other company, by its 1[* * *] manager or secretary, if any, and by not less than two directors of the company one of whom shall be a managing director where there is one.
(2) In the case of a company not being a banking company, when only one of its directors is for the time being in India, the balance sheet and the profit and loss account shall be signed by such director; but in such a case there shall be attached to the balance sheet and the profit and loss account a statement signed by him explaining the reason for non-compliance with the provisions of sub-section (1).
According to Section 217 (4): (4) The Board's report and any addendum thereto shall be signed by its chairman if he is authorised in that behalf by the Board; and where he is not so authorised, shall be signed by such number of directors as are required to sign the balance sheet and the profit and loss account of the company by virtue of sub-sections (1) and (2) of section 215.
In the given case, the suspicion has to be sorted out. A director is responsible to sign the accounts as per proceedings of the BOD, as above. Not signing has to be justified and whatever wrong is there has to be rectified, as per his duties.
06 August 2010
I would suggest you to have a chat with concerned director and discuss and explain the figures to him. The only way out is to remove his doubt through a peaceful conversion.
Try it and make him understand the legal process as explained by the expert above.
CAclubindia
