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Signatures in board resolution

Divya Garg (Director) (178 Points)

20 August 2011

Dear All,

We registered a Pvt Ltd company in Oct 2010 but haven't opened company bank account yet and didn't passed any board resolutions till now.

Company has 3 directors and one of the directors who is 90% owner of the company shares is outside India.

My Question is can the other 2 directors can still pass Board Resolution without 3rd director signature ? Is it acceptable ?

Also, Is it always on plain paper or we can have it on company letter head ?

We talked to HDFC and they said they need signature of all 3 directors in Board resolution.

Please advise.

Thanks,

Divya Garg

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11 Replies

vinay (CS) (65 Points)
Replied 20 August 2011

There is no need of all director signature, convey the board meeting by rest of two director and third director is not necessary to present as the quorum is 1/3 for the meeting.

any of the two present director will be elected as chairman of the meeting and he will also sign the resolution for bank account opening.

as far as resolution on letter head is concern you may set a format and of letter head and can be printed on normal a4 size paper.

Regards

Vinay

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Shruti_D (ACS) (453 Points)
Replied 20 August 2011

Agreed with Vinay. Just wanted to add one thing. Kindly clarify the format of Board Resolution with the Bank. Generally, the Banks have their specified formats. Also, they might be requiring signatures of all the directors as specimen signatures on the Account Opening Form not the Board Reolution. Get clarifications accordingly.

vinay (CS) (65 Points)
Replied 20 August 2011

specimen signatures are reuired only of those persons who are going to oprate the account like Director or General Manager or company Secretary etc, if the third director is not going to oprate the account there is no need of signature of that director.

Regards

vinay

Divya Garg (Director) (178 Points)
Replied 20 August 2011

Thanks Shruti and Vinay ...

Few more questions

Presence of only 2 directors is okay even for the Annual General Meeting ? Are there any issues if the 3rd director doesn't attend any of the company meeting even if he is major share holder (90%) of the company ? Do we have to pass any board resolution mentioning the same saying that he is away on leave etc etc ?

Since we haven't opened any company bank account yet directors haven't transferred any money for the shares they agreed for in MoA (So can we say company is carrying that money Cash in hand ?) . Also, we haven't issued any share certificate. Can we issue the share certificate to each of the director now and can they transfer the money once the company bank account is opened (in a months time) ? What's the procedure to issue share certificate ? Who issues the share certificate ?

Do we have to do any quartely filing or it's always annual filing with ROC and IT department ? Since company (registered in Oct 2010) already passed through one financial year without a bank account... is that a big issue ?

Thanks,
Divya

vinay (CS) (65 Points)
Replied 20 August 2011

in the AGM presence of shareholder is required so if rest two director are also shareholder then you can convey AGM or if shareholders are different from director then they should be present. it is not necessary for the shareholder who is holding 90% to present in the AGM. you have to wrire in the minutes of meeting of Board that LEAVE OF ABSENCE WAS GRANTED TO Mr.A.

Share certificate will be issued under signature of two directors (one of them should be MD if any) as u are not having the bank account, so u should treat the money as cash in hand and when your account got opened u may transfer that money in that account., as it is your internal practice u may show it from back date. return of allotement in E Form-2 is filed to ROC but usually for the first allotement companies does not file this but for better compliance it must be filed.

there is no quaterly return for RoC u have to hold AGM in 18 months of incorporation of company to adopt the audited accounts and then accounts will be filed in 23AC and 23 ACA (with in 30 days of AGM) and annual return (with in 60Days of AGM) will be filed in 20B. as far as IT is concerned i do not think u are having any tds or vat compliance if those compliance is not in your company than u have to file IT return before 31st Oct 2011.

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vinay (CS) (65 Points)
Replied 20 August 2011

read last line 31st Sep 2011 instead of 31st Oct 2011.

Divya Garg (Director) (178 Points)
Replied 21 August 2011

Thanks Vinay. It was very helpful.

also, I read somewhere in this forum that share certificate has to be issued in 3 months time of incorporation date ... since we haven't till now... will that be an issue ?

For cash in hand money, it's still in directors personal bank account so is it okay if we just transfer it online from directors bank to companys bank account once it's opened ? Do we have to do anything else ? Is it better practice to deposit it via cheque instead of online or cash ?

Also, for AGM ... we are showing it to have happened in Punjab but company is actually situated in Haryana. Is it acceptable ? I read somewhere that AGM has to be in city where company is registred.

Thanks,

Divya

vaibhav (CA & CS) (577 Points)
Replied 22 August 2011

Hello Divya,

Hope following points will resolve ur queries:

1) Attached is the file which will explain u the completer procedure related to Share Certificates.

2) It is advisable that first trasaction related to Cash transfer should be done by means of chq. Hence you are advise to transfer the money form directors personal account to co. acccount by chq as early as possible.

3) yes u have read correctly AGM must be held somewhere in city where company is registred.

regards

vaibhav sisodiya

Attached File : 45013 809335 cioscr.pdf downloaded: 860 times

CA H M JOHARI (CHARTERED ACCOUNTANT) (191 Points)
Replied 15 September 2011

Originally posted by : vinay
	read last line 31st Sep 2011 instead of 31st Oct 2011.

31 SEPT????

sruti gupta (Management Trainee) (103 Points)
Replied 03 May 2012

Can a Director sign the Board Resolutiopn for opening a bank account, which is in his favour, or in which he is authorized to maintian such account. please advice ??