Signing of balance sheet
This query is : Resolved
18 June 2013
Dear All, Now since video conferencing has been allowed, can a balance sheet approved through video conferencing be signed by two directors sitting at different places by fax or email (one at delhi and other in mumbai) before forwading the same to the auditors as per section 215 and then adopted by the board in the same meeting after getting the scanned/fax copy of auditors report in the same board meeting. For example: Is it correct to sign the balance sheet in the following fashion: During the board meeting the MD signs the balance sheet send the scanned copy to delhi for signing of other director other director signs it and send it to auditors for audit report and finally auditors sitting in delhi give report to the board on the same day on the basis of scanned copy. Auditor Managing Director Director Delhi Mumbai Delhi 10.06.2013 10.06.2013 10.06.2013 Regards
Read more at: https://www.caclubindia.com/forum/signing-balance-sheet-by-video-conferencing-253037.asp
Read more at: https://www.caclubindia.com/forum/signing-balance-sheet-by-video-conferencing-253037.asp
25 July 2025
Great question about signing and approving the balance sheet via video conferencing and electronic means! Here's a detailed answer considering the legal and practical aspects under the Companies Act and auditing standards:
---
### Can a balance sheet be approved and signed remotely (via video conferencing, fax, email)?
---
### ✅ Legal Position & Practical Considerations:
1. **Approval of Balance Sheet in Board Meeting via Video Conferencing:**
* The Companies Act, 2013 **allows board meetings to be conducted via video conferencing** or other audio-visual means (Section 173).
* So, the **board meeting approving the balance sheet can be held via video conferencing** with directors present from different locations (e.g., Delhi and Mumbai).
2. **Signing of Balance Sheet:**
* **Section 134(1)** of Companies Act requires the **balance sheet to be signed by the Chairperson of the company (if authorized), the Managing Director, or Director(s) who is/are authorized by the board**.
* Traditionally, physical signatures on the printed balance sheet are expected, but **electronic signatures or scanned copies** are increasingly accepted due to technological advancement.
* However, **signing by fax or email is generally considered as "copies" and may not be accepted as original signed documents** by regulators or auditors.
* **Digital Signatures (DSC)** are legally valid under the Information Technology Act and MCA guidelines and are preferred.
3. **Process as described (MD signs in Mumbai, sends scanned copy to Delhi director who signs and sends to auditors):**
* This is **not strictly ideal** because:
* Sending scanned/faxed copies for signatures can raise **issues of authenticity**.
* Auditors require **original signed documents** (physical or digital signature) for their records.
* **Better practice**:
* Either conduct the meeting virtually, approve the balance sheet in the meeting, then have each director sign a physical copy (or digitally sign via DSC).
* Alternatively, use **digital signatures** for electronic signing which are legally recognized.
4. **Auditor's report and signing during the same meeting:**
* Auditor needs to **audit the financial statements first**.
* It’s not usual to have the auditor issue the report during the board meeting on the basis of scanned documents.
* The audit report should be prepared on **final original signed financials**.
* Usually, the **board approves the balance sheet after receiving the auditor’s report** (or at least the draft report).
---
### Summary:
| Step | Recommended Practice |
| ------------------------------------ | ------------------------------------------------------------------------------- |
| Board meeting via video conferencing | Allowed |
| Signing balance sheet | Prefer physical or digital signatures (DSC); avoid fax/email scanned signatures |
| Auditor’s report timing | Auditor reviews final signed copy before issuing report |
| Sending scanned copies for signature | Not preferred as original; use digital signatures or physical copies |
---
### Final suggestion:
* Conduct the meeting via video conferencing.
* Approve the balance sheet in that meeting.
* Arrange physical or **digital signing (DSC)** of the approved balance sheet by authorized directors.
* Provide the **signed original or DSC-signed copy** to the auditors.
* Auditor issues the report on final signed statements.
* Board adopts the balance sheet after receiving the auditor's report.
---
If you want, I can help draft a process flow or email template to organize this smoothly!
---
### Can a balance sheet be approved and signed remotely (via video conferencing, fax, email)?
---
### ✅ Legal Position & Practical Considerations:
1. **Approval of Balance Sheet in Board Meeting via Video Conferencing:**
* The Companies Act, 2013 **allows board meetings to be conducted via video conferencing** or other audio-visual means (Section 173).
* So, the **board meeting approving the balance sheet can be held via video conferencing** with directors present from different locations (e.g., Delhi and Mumbai).
2. **Signing of Balance Sheet:**
* **Section 134(1)** of Companies Act requires the **balance sheet to be signed by the Chairperson of the company (if authorized), the Managing Director, or Director(s) who is/are authorized by the board**.
* Traditionally, physical signatures on the printed balance sheet are expected, but **electronic signatures or scanned copies** are increasingly accepted due to technological advancement.
* However, **signing by fax or email is generally considered as "copies" and may not be accepted as original signed documents** by regulators or auditors.
* **Digital Signatures (DSC)** are legally valid under the Information Technology Act and MCA guidelines and are preferred.
3. **Process as described (MD signs in Mumbai, sends scanned copy to Delhi director who signs and sends to auditors):**
* This is **not strictly ideal** because:
* Sending scanned/faxed copies for signatures can raise **issues of authenticity**.
* Auditors require **original signed documents** (physical or digital signature) for their records.
* **Better practice**:
* Either conduct the meeting virtually, approve the balance sheet in the meeting, then have each director sign a physical copy (or digitally sign via DSC).
* Alternatively, use **digital signatures** for electronic signing which are legally recognized.
4. **Auditor's report and signing during the same meeting:**
* Auditor needs to **audit the financial statements first**.
* It’s not usual to have the auditor issue the report during the board meeting on the basis of scanned documents.
* The audit report should be prepared on **final original signed financials**.
* Usually, the **board approves the balance sheet after receiving the auditor’s report** (or at least the draft report).
---
### Summary:
| Step | Recommended Practice |
| ------------------------------------ | ------------------------------------------------------------------------------- |
| Board meeting via video conferencing | Allowed |
| Signing balance sheet | Prefer physical or digital signatures (DSC); avoid fax/email scanned signatures |
| Auditor’s report timing | Auditor reviews final signed copy before issuing report |
| Sending scanned copies for signature | Not preferred as original; use digital signatures or physical copies |
---
### Final suggestion:
* Conduct the meeting via video conferencing.
* Approve the balance sheet in that meeting.
* Arrange physical or **digital signing (DSC)** of the approved balance sheet by authorized directors.
* Provide the **signed original or DSC-signed copy** to the auditors.
* Auditor issues the report on final signed statements.
* Board adopts the balance sheet after receiving the auditor's report.
---
If you want, I can help draft a process flow or email template to organize this smoothly!
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