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Corporate and Other Laws · Accounts of Companies

Approval, Signing and Authentication of Financial Statements

Updated 4 October 2026 · Fact-checked

Under Section 134, the Board approves the financial statements first. Then the authorised chairperson, or two directors (one the managing director, if any), plus the CEO, CFO and company secretary where appointed, sign them. A One Person Company needs one director's signature. The auditor's report is attached and the statements are filed with the Registrar under Section 137.

Understand Approval, Signing and Authentication of Financial Statements

A company's financial statements are not final when the accountant finishes them. The Board of Directors must first approve them. Only after approval are they signed and sent to the auditor for his report. This order matters, and examiners test it.

Signing is called authentication. Section 134(1) names the signatories. The chairperson can sign if the Board has authorised him. Otherwise two directors sign, and one of them must be the managing director, if the company has one. The Chief Executive Officer, Chief Financial Officer and company secretary also sign, wherever they are appointed. In a One Person Company, only one director signs.

The auditor's report must be attached to every financial statement (Section 134(2)). A report by the Board of Directors must be attached to statements laid before the company in general meeting (Section 134(3)). A signed copy of the financial statement must be issued, circulated or published along with its notes, the auditor's report and the Board's report (Section 134(7)).

After the AGM, the company files a copy of the adopted financial statements, with all attached documents, with the Registrar within 30 days of the AGM (Section 137). If the statements are not adopted at the AGM, the unadopted statements are still filed within 30 days of the AGM. The Registrar keeps them as provisional. Penalties apply for default under both sections.

Key rules to remember

Board approval before signing (s.134(1))
Board approves → authorised signatories sign → sent to auditor for report
Approval comes first. Signing is for submission to the auditor.
Who signs the financial statements (s.134(1))
Chairperson (if authorised by Board) OR two directors, one being MD if any; plus CEO, CFO and company secretary, wherever appointed
In a One Person Company, only one director signs.
Who signs the Board's report (s.134(6))
Chairperson (if authorised by Board); otherwise at least two directors, one being MD; or the director where there is one director
Note the CEO, CFO and CS are not named here. They are named only for the financial statements.
Documents issued with signed financial statements (s.134(7))
Notes + auditor's report + Board's report
A signed copy is issued, circulated or published along with these three.
Filing with Registrar (s.137(1))
Within 30 days of the date of AGM
Includes consolidated statements, if any, and all attached documents.
Filing if AGM not held (s.137(2))
Within 30 days of the last date by which the AGM should have been held, with a statement of facts and reasons
Statements must be duly signed.
Filing by One Person Company (s.137, third proviso)
Within 180 days from the closure of the financial year
The statements are those adopted by its member.
Penalty under s.134(8)
Company: ₹3,00,000. Every officer of the company who is in default: ₹50,000
These are fixed penalty amounts.
Penalty under s.137(3)
Company: ₹10,000 plus ₹100 per day of continuing failure, maximum ₹2,00,000. Officer in default: ₹10,000 plus ₹100 per day after the first, maximum ₹50,000
Officers liable: MD and CFO; if absent, any director charged by Board; if none, all directors.

How to solve Approval, Signing and Authentication of Financial Statements questions

Use this method for any question on signing, attachment or filing of financial statements.

  1. 1Identify the type of company. A One Person Company has special rules for signing and filing.
  2. 2Check the sequence: Board approval, then signing, then submission to the auditor, then AGM adoption, then filing.
  3. 3For signing, list who the section names: authorised chairperson or two directors (one MD, if any), plus CEO, CFO and company secretary where appointed.
  4. 4Separate the financial statements from the Board's report. Their signatories differ (s.134(1) versus s.134(6)).
  5. 5List the documents attached: auditor's report, Board's report, notes. Add accounts of foreign subsidiaries for filing, where relevant.
  6. 6Apply the time limit: 30 days from the AGM, or the special period for a One Person Company or where no AGM was held.
  7. 7State the penalty with the correct section and the persons liable.
  8. 8Conclude clearly: valid or invalid, compliant or in default, and the consequence.

Quickest way: Sign-Attach-File checklist for MCQs and written answers

When to use it: Use it when the question gives a fact pattern and asks if the company has complied.

  1. For MCQs, look for the trap. Common traps: signing before Board approval, one director signing in a normal company, or a wrong filing period.
  2. Eliminate options that give the wrong signatories. The chairperson can take the place of two directors only if authorised by the Board, and the CEO, CFO and company secretary, where appointed, must still sign.
  3. Match numbers: 30 days (normal filing), 180 days (One Person Company), ₹3,00,000 and ₹50,000 (s.134 default).
  4. For written answers, use three parts: provision (quote the section), facts (apply to the case), conclusion (one line).
  5. Write the section number beside each rule, for example s.134(1), s.134(6), s.137(1). This earns step marks.

Common mistakes in Approval, Signing and Authentication of Financial Statements

  • Saying any two directors can sign the financial statements.

    Students remember 'two directors' and forget the managing director condition.

    Fix: Write: two directors, one of whom must be the managing director, if any. Also add the CEO, CFO and company secretary where appointed.

  • Treating the Board's report signatories as the same as the financial statements signatories.

    Both sections look similar, so students merge them.

    Fix: Remember s.134(6) for the Board's report does not name the CEO, CFO or company secretary. It names the authorised chairperson, or at least two directors including the MD, or the sole director.

  • Writing that the auditor's report is prepared before Board approval.

    Students think of the audit as an earlier step.

    Fix: The statements are approved by the Board and signed for submission to the auditor for his report. Approval comes first.

  • Applying the 30-day filing rule to a One Person Company.

    Students forget the proviso for OPC.

    Fix: A One Person Company files within 180 days from the closure of the financial year, with statements adopted by its member.

  • Mixing up the penalty amounts of s.134 and s.137.

    Both sections carry penalties, and numbers look alike.

    Fix: s.134(8): ₹3,00,000 on the company and ₹50,000 on each officer in default. s.137(3): ₹10,000 plus ₹100 per day, with caps of ₹2,00,000 and ₹50,000.

  • Forgetting the accounts of foreign subsidiaries when listing filing documents.

    Students focus only on the company's own documents.

    Fix: Mention that accounts of subsidiaries incorporated outside India, which have no place of business in India, are attached to the filing.

Worked examples

Example 1

The Board of Raman Ltd, a public company with a managing director, approved the financial statements. The chairperson, who has not been authorised by the Board, and one non-executive director signed them. The CFO and company secretary also signed. Examine whether the signing complies with the Companies Act, 2013.

Show the solution
  1. Provision: Under s.134(1), the financial statements are signed by the chairperson if authorised by the Board, or by two directors, one of whom is the managing director, if any. The CEO, CFO and company secretary, wherever appointed, also sign.
  2. Facts: The chairperson was not authorised. So the alternative applies: two directors including the managing director. The signatories are the chairperson and a non-executive director. The managing director has not signed.
  3. Conclusion on directors: The requirement of two directors including the managing director is not met.
  4. The CFO and company secretary have signed, as the section requires. The facts do not say whether a CEO is appointed. If one is appointed, his signature is also required.
  5. Consequence: s.134(8) provides a penalty if a company is in default in complying with the section. The company is liable to a penalty of ₹3,00,000, and every officer of the company who is in default is liable to ₹50,000. Here, the officers in default are those responsible for the non-compliant signing. The facts do not name them, so you identify them from the case facts.

Answer: The signing does not comply with s.134(1). Without Board authorisation for the chairperson, two directors must sign, one being the managing director. For this default the company is liable to the s.134(8) penalty of ₹3,00,000, and every officer in default, meaning those responsible for the non-compliant signing, is liable to ₹50,000.

Example 2

Meera Pvt Ltd held its AGM on 20 September and filed its adopted financial statements with the Registrar on 25 October. Compute the delay and the penalty under s.137(3).

Show the solution
  1. Under s.137(1), filing is due within 30 days of the AGM date.
  2. 20 September plus 30 days: 10 days remain in September (21 to 30 September), and the other 20 days fall in October. So the last date is 20 October.
  3. Filing on 25 October is 5 days after the deadline (21, 22, 23, 24 and 25 October), so the company is in default. The failure continued for 5 days.
  4. Company penalty under s.137(3): ₹10,000 plus a further penalty of ₹100 for each day during which the failure continues, up to a maximum of ₹2,00,000. For 5 days: ₹10,000 + (5 × ₹100) = ₹10,500, within the cap.
  5. Officers (the managing director and CFO, if any) under s.137(3): ₹10,000 plus a further penalty of ₹100 for each day after the first during which the failure continues, up to a maximum of ₹50,000. Of the 5 days of failure, 4 are after the first: ₹10,000 + (4 × ₹100) = ₹10,400, within the cap.
  6. Wording of s.137(3) used: for the company, 'a further penalty of one hundred rupees for each day during which such failure continues'; for the officers, 'a further penalty of one hundred rupees for each day after the first during which such failure continues'.

Answer: The deadline was 20 October and the delay is 5 days. The company penalty is ₹10,000 plus ₹100 for each day the failure continues: ₹10,000 + (5 × ₹100) = ₹10,500. Each officer liable is penalised ₹10,000 plus ₹100 for each day after the first: ₹10,000 + (4 × ₹100) = ₹10,400.

Exam tips

  • Learn the signatories for the financial statements and the Board's report as two separate lists. Examiners often test the difference.
  • Memorise the numbers: 30 days, 180 days, ₹3,00,000, ₹50,000, ₹10,000, ₹100 per day, ₹2,00,000 and ₹50,000 caps.
  • In case studies, check the One Person Company angle first. It changes both signing and filing.
  • In written answers, quote the section number with each rule and end with a one-line conclusion.
  • For day-count questions, compute the deadline from the AGM date, then the days of delay, then apply the per-day rate. Follow the wording: the officer limb counts only days after the first, and the company limb has no such words.

Practice questions from Accounts of Companies

Approval, Signing and Authentication of Financial Statements in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Approval, Signing and Authentication of Financial Statements: frequently asked questions

Who signs the balance sheet of a company under the Companies Act, 2013?

Under Section 134(1), the financial statements are signed by the chairperson if the Board has authorised him, or by two directors, one of whom is the managing director, if any. The CEO, CFO and company secretary also sign, wherever appointed. In a One Person Company, one director signs.

Within how many days must financial statements be filed with the Registrar?

Under Section 137(1), within 30 days of the date of the AGM. A One Person Company files within 180 days from the closure of the financial year. If no AGM was held, filing is due within 30 days of the last date by which the AGM should have been held.

What is the penalty for default under Section 134?

The company is liable to a penalty of ₹3,00,000. Every officer of the company who is in default is liable to a penalty of ₹50,000. This is under Section 134(8).

What happens if the financial statements are not adopted at the AGM?

The unadopted statements with the required documents are still filed with the Registrar within 30 days of the AGM. The Registrar takes them on record as provisional. After adoption at the adjourned AGM, the adopted statements are filed within 30 days of that adjourned AGM.