Start with the instrument
Under section 21 of the Companies Act, 2013, subject to any other provision of the Act, documents or proceedings requiring company authentication and contracts made by or for a company may be signed by a member of the key managerial personnel, officer or employee of the company duly authorised by its board. Section 22 addresses specified negotiable instruments and separately provides a written attorney route for deeds. Identify the actual document and any specific execution rule before choosing a signer.
Read the applicable text: India Code: Companies Act, 2013, sections 21 and 22.
Translate the board decision into a release control
Maintain a record of entity, covered instruments, authorised office or named holder, monetary limits, single or joint signature, date of operation and revocation. Match the actual signatory to the resolution and the company's current records. Where the delegation defines a gross or aggregate exposure, measure it on that basis, including linked orders if the wording requires it. Section 21 itself sets no monetary cap.
Keep deeds on their own track
Under section 22(2) the company may authorise an attorney in writing, generally or for specified matters, to execute deeds in or outside India. The written authority is under its common seal if it has one. For a company without a common seal, the authority must be made by two directors, or by a director and the company secretary where appointed. Section 22(3) states that the attorney's deed on behalf of the company under the attorney's seal binds the company. Check applicable stamp, registration and local execution rules separately.
Distinguish the financing instrument from the underlying contract
Section 22(1) covers bills of exchange, hundis and promissory notes made, accepted, drawn or endorsed in the company's name, on its behalf or account by someone acting under its express or implied authority. A borrowing agreement and a note issued under it may require separate analysis. Treat a claimed implied authority as a matter of evidence; for internal release purposes seek clear written authority before dispatch.
Close gaps before release
Preserve the executed document, authority in force on signing, signer identity and final annexures. A counterparty copy or a seal impression is not evidence of the full delegation. If a transaction has already been signed with a possible defect, preserve the actual chronology and obtain an instrument-specific opinion on the consequences and available cure; do not backdate the board record.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Contract below the delegated limit
A ₹9.2 lakh contract is within a ₹12 lakh board limit by ₹2.8 lakh. Release still requires that the category, signatory and date are covered.
Illustrative example 2: Linked releases exceed the cap
A single programme has releases of ₹7 lakh and ₹6 lakh. The delegation aggregates related releases and caps them at ₹12 lakh. Exposure is ₹13 lakh, so the existing authority is short by ₹1 lakh.
Illustrative example 3: Gross exposure test
A hypothetical contract has a ₹9.8 lakh base plus ₹1.764 lakh separately payable tax. A gross ₹11 lakh limit is exceeded by ₹0.564 lakh; use the gross wording in the resolution.
Illustrative example 4: Attorney authority signers
A no-seal company with an appointed company secretary obtains one director's signature alone. One director alone is insufficient. On these facts the authority can be made by two directors or by one director and the appointed company secretary.
Illustrative example 5: Revised price before execution
The draft increased from ₹18 lakh to ₹23 lakh against a ₹20 lakh cap. The final version exceeds the cap by ₹3 lakh. The draft's earlier review does not clear the final version.
Illustrative example 6: Separate exposures in one deal file
An approved ₹25 lakh supply contract includes a separate ₹5 lakh promissory note as security. The commercial documents show a 20% security ratio. Test authority for the note separately; it is not a second ₹5 lakh purchase.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Classify the document | Final contract, deed or note and operative clauses |
| 2 | Confirm the signing entity | Company identity and final execution block |
| 3 | Check special execution rules | Applicable statute, articles and transaction requirements |
| 4 | Retrieve current board authority | Certified resolution and later changes |
| 5 | Identify the signer | Appointment or employment and authority date |
| 6 | Compute actual covered exposure | Approved cap, tax and linked-order schedule |
| 7 | Check joint signers | Completed signature sequence |
| 8 | Check attorney instrument | Written authority, applicable signers and scope |
| 9 | Match signed and approved versions | Final comparison and annexures |
| 10 | Archive evidence for third-party requests | Executed copy and authority trail |
Sixteen practitioner FAQs
1. Does a CFO title alone establish section 21 authority?
Check the board authorisation and the final contract; job title alone does not evidence the delegation.
2. Can an employee sign?
Section 21 includes an employee duly authorised by the board within its scope.
3. Is a general resolution enough?
Only to the extent that its actual wording covers the document and any limits.
4. Is every purchase-order call-off separate?
Apply the delegation's aggregation terms and the substance of the commitment.
5. Is the cap necessarily exclusive of GST?
No. Read the approved wording and document the measurement basis.
6. Does section 21 displace a special signature rule?
It expressly yields where the Act provides otherwise.
7. Is a company seal compulsory for every contract?
Section 21 does not impose one for every contract.
8. What if a company has no seal for attorney authority?
Apply the alternative signers specified in section 22(2).
9. Can attorney authority cover overseas deeds?
Section 22(2) extends to deeds in or outside India, subject to other applicable execution rules.
10. Can an attorney sign any deed?
Read the written authority and identify exclusions or transaction limits.
11. What does section 22(3) address?
A deed executed by the authorised attorney for the company and under the attorney's seal.
12. Does the supply agreement clear a promissory note?
Verify authority for the note independently.
13. Can section 22(1) authority be implied?
The section recognises it; establish the supporting facts before relying on it.
14. Should the commercial team date the approval to match a prior signature?
Preserve actual dates and assess any available cure on the facts.
15. Is the approval page alone enough evidence?
Retain the full authority text and the signed instrument with annexures.
16. Do statutory filing signatories follow the same matrix?
Check the relevant filing and signature requirement separately.