Authorized signatory

Resolution passed and signed by the of Board of Directors  authorizing, one of ther Director to execute Deeds is  enoug, if the properties are purchased on company's name represented by the same Director. But if the immoveable property is purchased in the name of  company represented by some 'X' Director, then he has to execute POA  in favour of that Director whom they have authorised to execute Deeds.

Sec. 48 of the Companies Act, 1956 (“Act”) stipulates that the Company may, in writing under its common seal, empower any attorney to execute deeds on its (Company’s) behalf. Going by this Section, power to sign a deed by virtue of a document in writing, under the common seal of the company (which is essentially a power of attorney). Since there is no definition (to my knowledge) of the word ‘deed’ in the Act, is it appropriate to consider this covers all types of contracts of the Company?

There is an authority granted for Dr’s/CS/Manager u/S. 54 of the Act, it is clear from the words ‘authentication’ used in the provision that it is mere certification of genuineness or authorship (certified true copy).

The Section that deals with Board’s power (S. 291) also states generally “to do all such acts and things, as the company is authorized to exercise and do” and is not specific on authorization of documents on behalf of a Company.

A Power of Attorney (“PoA”) is essential for a person to act on behalf of any other person and to do such acts as may be provided in the PoA. A company is a judicial person.

Reading the above provisions, is there any reason not to construe that a PoA is essential for an authorized signatory of a Company?

I request views of members.

In my view board resolution will do.

What you mean by :

"Can a PoA indemnify the acts of the constituted attorney? Is that clause valid under law?"

Hi Sathe,

In case statutory authorities or any concerned person requires the proof of authorization for the signatory, is it valid to provide a certified true copy of the board resolution?

In many cases, the board resolutions does give only a statement of authorization for the signatory. It does not provide for any other details like liability of the signatory, validity and revocation (like upon resignation), company's responsibility for the acts done by signatory, witness, notarization etc. Taken in a Court of Law, will the resolution hold good as a primary evidence?

Second query was whether the indemnity clause in a PoA valid under law? Can the company indemnify the acts of the signatory, other wise than by a directors/officers insurance?

Dear All

In case of Company, a Board resoluiton is valid document and will do for all authority purpose. However some commercial transactions are governed under other piece of laws and department policy and sytem. Thereofre, if other department e.g. revenue, Court etc isnsist PoA, A Company needs to provide the same. PoA is more secure than Resoluiton. Further if X pavt. Ltd. dealing with Mr. A, Mr. A can insist PoA from X Pvt. Ltd. for his own security, No laws force Mr. A to act and rely on the board resolution. 

So, after all its matter of practice and requirement radher than to get in to deep of legality.

PoA is contract under agencies laws and both the party can agreed on terms. Accodingly i think nothing wrong to provide indemnity terms in PoA

Suresh

true copi valid advocate