# Section 21 – Authentication of Documents, Proceedings and Contracts

## What is the section about?

A company, being a juristic (artificial) person, cannot itself sign. It acts through human beings. Section 21 specifies who can authenticate the company's documents/contracts so that they are binding.

## The Rule

> Save as otherwise provided in this Act,

> (a) a document or proceeding requiring authentication by a company; or

> (b) contracts made by or on behalf of a company,

> may be signed by:

> - any Key Managerial Personnel (KMP), OR

> - any officer or employee of the company duly authorised by the Board.

## Three Important Take-Aways

1. "Save as otherwise provided" – if another section of the Act prescribes a specific mode (e.g., signing of financial statements u/s 134), that overrides Section 21.

2. KMP need not be specifically authorised by the Board – their position itself gives them authority.

3. An ordinary officer/employee requires specific Board authorisation (typically by a Board resolution) to sign on behalf of the company.

## Who is a KMP?

Under Section 2(51), KMP includes: Managing Director, Whole-time Director, Manager, CEO, CFO, Company Secretary, and such other officer as may be prescribed.

Worked example

### Example 1

Q: A vendor sends a sale contract to XYZ Ltd. It is signed by the company's HR Manager (not a KMP, no Board resolution authorising him). Is the contract validly authenticated under Section 21?

A: No. The HR Manager is neither a KMP nor an officer duly authorised by the Board. The signature does not satisfy Section 21. The contract is not validly authenticated on behalf of the company.

### Example 2

Q: The CFO of ABC Ltd. signs a contract without any specific Board resolution. Is the contract validly authenticated?

A: Yes. CFO is a KMP under Section 2(51), and KMP can authenticate documents/contracts under Section 21 without separate Board authorisation.

⚠️ Common exam mistakes

Treating any officer's signature as sufficient – only KMP automatically have authority; others need Board authorisation.
Overlooking the 'save as otherwise provided' opening – specific provisions (e.g., for financial statements, prospectus) override Section 21.
Confusing 'authorised by Board' with 'authorised by Managing Director' – Section 21 specifically requires Board authorisation.

Bare-Act text Section 21 · Companies Act, 2013 · click to expand

Section 21 – Authentication of documents, proceedings and contracts. Save as otherwise provided in this Act,— (a) a document or proceeding requiring authentication by a company; or (b) contracts made by or on behalf of a company, may be signed by any key managerial personnel or an officer or employee of the company duly authorised by the Board in this behalf.

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