Authorised Signatory and Authority Letter: Meaning and Use

An authorised signatory is a person a company formally permits to sign documents and deal with third parties on its behalf. An authority letter is the written document that gives that permission, usually backed by a board resolution, and is shown to banks, offices and portals.

Why it matters for business registrations

A company is a legal person, so it acts only through people. During private limited company registration and afterwards, someone must sign forms, applications and bank papers. Without a proper authorisation, a bank or department can refuse the document, even if the signer is a director.

It also protects the company. Naming who may sign, and for what, limits the risk of unapproved commitments.

Where and when it is required

• Opening and operating a bank account
• Applying for GST registration, where the applicant names an authorised signatory
• Filing forms with the ROC and other departments
• Signing contracts, tenders and vendor documents
• Collecting documents or attending a hearing on the company’s behalf

For example, a director may be abroad while a manager has to submit papers at a bank branch. A signed authority letter, with the resolution, lets the manager do it.

Key points: how to do it properly

Start with the board. A resolution records who is authorised, for which tasks, and for how long. The letter then goes on company letterhead, signed by a director, and names the person, the purpose and the scope. Attach a copy of the resolution when the receiving office asks, plus the signatory’s ID proof and a specimen signature.

Make it specific. A letter for “GST matters” is easier to accept than a vague blanket one. After incorporation, authorisations often sit alongside other post-incorporation compliance steps, so it helps to settle them early.

Common mistakes

• Issuing a letter with no board resolution behind it
• No date, no scope or no specimen signature
• Leaving an old signatory active after they leave the company
• Signing by someone who is not actually authorised

Related guides: Board resolution, PAN card, MCA and ROC

FAQs

Who can be an authorised signatory?

Usually a director or another person the board names by resolution, for the tasks the resolution covers.

Is a board resolution always needed?

Most banks and departments ask for one, so it is safest to pass it before issuing the letter.

Can the authorisation be withdrawn?

Yes. The board can cancel it by a fresh resolution, and the receiving institutions should be told.

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