Who can sign a cheque on a company's bank account?

Only the authorised signatories named in the bank's account mandate — and for a company, that mandate rests on a board resolution naming the signatories, their mode of operation (single/joint), and any amount limits. Directors have no automatic cheque-signing power from the office itself; a director signs because a resolution filed with the bank says so, and a non-director officer authorised the same way signs with equal validity.

Is a board resolution mandatory for cheque signing authority?

For a company, effectively yes. A company is a separate legal person that can only act through authorised humans, and banks require a certified true copy of the board resolution naming cheque signatories before honouring their signatures. Proprietorships need no resolution (the proprietor signs personally), partnerships follow the deed plus the bank mandate, and LLPs authorise designated partners through the LLP agreement.

What is joint signing, and when should two signatures be required?

Joint signing means the mandate requires two named signatories on every cheque (or on cheques above a threshold). The pragmatic SMB pattern is threshold signing: either signatory alone up to a limit such as ₹50,000–₹1,00,000, and two signatures above it. Routine payments stay fast while large outflows get a second review — which quietly defeats the most common internal-fraud pattern of a lone insider writing large cheques.

What does "for and on behalf of" mean on a company cheque?

It declares the capacity of the signature: the human is signing as the company's authorised instrument, not personally. The convention is a rubber stamp or printed line "For [Company] Pvt. Ltd." above the signature and the signatory's designation below it. Omitting it creates avoidable ambiguity about whether the person signed for the company or themselves — ambiguity that matters intensely if the cheque later bounces.

If a company cheque bounces, is the signatory personally liable?

Yes, potentially. Under Section 138 read with Section 141 of the NI Act, both the company and every person in charge of and responsible for its business at the time — which squarely includes the signatory — can be prosecuted when a company cheque bounces for insufficient funds. That's why a signatory should confirm the account will hold funds before signing, and why resigned directors must ensure their exit is on record and off the mandate.

How do you add or remove an authorised signatory on a company account?

Both directions need a fresh board resolution — naming the new signatory or withdrawing the old authority — plus the bank's mandate-change forms. Adding also requires the new signatory's KYC documents and a specimen signature, and takes a few working days to become effective. Removal should be filed the day the person exits: an ex-signatory left on the mandate can still sign valid cheques and can still be named in a cheque-bounce complaint.

Can a proprietor let an accountant sign business cheques?

Yes — a proprietor can add another person as an authorised signatory through the bank's mandate or a power of attorney, since the account is legally the proprietor's own. But the authority and its consequences remain personal to the proprietor, so the same disciplines apply: a written scope, no signed blanks, a cheque register, and prompt withdrawal of the mandate when the arrangement ends.

Who can sign a company cheque? Authorised signatories, board resolutions & liability (2026)

July 31, 2026Cheqify Team9 min read

Banking & RBI Cheque Productivity

Who can sign a company cheque? Authorised signatories, board resolutions & liability (2026)

The cheque was perfect on its face. Payee spelled to the letter, words and figures in agreement, date current, ink unbroken. The bank returned it anyway — "drawer's signature differs."

Except it didn't differ. The new director's signature was steady, practised, identical to the one on his passport. The problem was simpler and stranger: the bank had never been told he existed.

That return memo is the whole subject of this guide. Signing authority on a business account has nothing to do with seniority, shareholding, or the title on a business card — and everything to do with two documents most SMBs file and forget. Here's who can sign, structure by structure, what the board resolution actually does, why the law holds the signatory personally to account, and the housekeeping that keeps a signing desk out of trouble.

The bank doesn't read your letterhead — it reads the mandate

Every business account opens with a mandate: the instruction set that tells the bank whose signature moves the money. It names each authorised signatory, records a specimen signature for each, and fixes the mode of operation — singly, jointly, or in some combination.

From that day forward, the mandate is the only org chart the bank recognises. A managing director who was never added to it cannot sign a valid cheque; an office manager who was added can. When a leaf is presented, the clerk compares the signature against the specimen card and the mandate's rules — nothing else. Promotions, resignations, and boardroom reshuffles change nothing at the counter until the paperwork reaches the branch.

Most "signature differs" returns at companies aren't forgery scares. They're mandate lag — the gap between who the business thinks can sign and who the bank knows can.

Who signs, structure by structure

The rules shift with the legal shape of the business, because each shape answers a different question: who is the drawer?

Sole proprietorship — the proprietor is the account

A proprietorship has no legal identity apart from its owner. The proprietor signs, full stop — the account is legally theirs, trading under a business name. A proprietor can authorise someone else (an accountant, a spouse) through the bank's mandate or a power of attorney, but the authority flows from the proprietor personally, and so does every consequence of its use.

Partnership firm — the deed decides, the mandate enforces

In a partnership, partners sign as the partnership deed provides. Under partnership law any partner can generally bind the firm, but the bank follows the narrower instruction: the mandate the partners filed. If the deed says financial instruments need two partners, and the mandate says the same, one partner's lone flourish comes back unpaid. Deed and mandate should agree — when they drift apart, the mandate wins at the counter and the deed wins in the dispute afterwards, which is exactly the kind of contradiction to avoid.

Company — a person that cannot hold a pen

A private or public limited company is a separate legal person, and here's the elegant problem: a legal person cannot sign anything. It acts only through humans it authorises — and for cheques, that authorisation is the board resolution. Directors have no automatic cheque-signing power by virtue of the office; a director signs because a resolution names them, and a CFO or accounts officer signs on exactly the same footing. The resolution, not the designation, is the source of the authority.

LLP — designated partners, by agreement

An LLP mirrors the company logic with partnership vocabulary: it's a separate legal person that acts through its designated partners, and the LLP agreement (plus a resolution of partners, where the bank asks for one) fixes who signs and how. The bank mandate then records it, same as everywhere else.

The board resolution — the company's signature, in writing

For a company, the board resolution is where signing authority is born. A cheque-signing resolution typically fixes four things:

Who — the signatories by name and designation, with specimen signatures annexed
How — singly, jointly, or "any two of the following"
How much — amount thresholds, if the board wants them (more below)
On which accounts — the specific bank accounts the authority covers

A certified true copy of the resolution goes to the bank with the mandate forms and each signatory's KYC. Until it does, the resolution is a company's private intention; after it does, it's the bank's operating instruction. Boards that pass resolutions and forget to file them have authorised precisely nobody, as far as the counter is concerned.

Keep the resolution's language boring and exact. "Mr. A and Ms. B, jointly, for amounts above ₹1,00,000; either singly below" survives contact with a bank clerk. "The directors as may be necessary" does not.

Single, joint, and the threshold rule

The mode of operation is the most underused governance tool in the SMB kit. Three patterns cover almost every business:

Single signatory — one authorised person signs alone. Fast, frictionless, and a single point of failure. Sensible for small accounts and small amounts.
Joint signatories — every cheque needs two named signatures. Maximum control, maximum friction; payday takes two calendars.
Threshold signing — the pragmatic hybrid: either signatory alone up to a limit (say ₹50,000 or ₹1,00,000), two signatures above it. Routine payments move at single-signature speed; anything that could genuinely hurt the business gets a second pair of eyes.

The threshold pattern earns a specific mention because it quietly defeats the most common internal fraud shape — a lone insider writing large cheques — without slowing the everyday. If your account still runs on the single-signatory default it opened with years ago, this is the cheapest control upgrade available: one resolution, one mandate form.

"for and on behalf of" — four words that place the signature

Look at a properly signed company cheque and you'll see the convention: a rubber stamp or pre-printed line reading "For [Company Name] Pvt. Ltd.", the signature below it, and the signatory's designation beneath that.

This isn't ceremony. The words declare capacity: this hand signs as the company's instrument, not as a private individual. The drawer of the cheque is the company; the human is its authorised means. Skip the convention and sign bare on a company account, and you've created avoidable ambiguity about whether you signed for the company or for yourself — ambiguity that a payee's lawyer will happily explore if the cheque later bounces. The stamp costs forty rupees. Use it on every leaf.

When the company cheque bounces — the signatory in the dock

Here is the part every signatory should read twice before accepting the pen. When a company cheque is dishonoured for insufficient funds, Section 138 of the NI Act doesn't stop at the company. Section 141 extends the offence to every person who was in charge of and responsible for the company's business at the time — and the signatory of the cheque stands squarely in that circle. The complaint routinely names the company and the human who signed.

The company signs through a human hand — and Section 138 remembers whose hand it was. When a company cheque bounces, the summons carries two names: the company's, and the signatory's.

The practical consequences are blunt:

Signing is not clerical. Before signing, a signatory is entitled to ask — and should ask — whether the account will hold funds when the cheque presents. "Accounts told me to sign" is not a defence known to law.
Resignation must be on the record. A director who resigned before the cheque was issued has a defence — but only if the resignation was properly filed and provable. Departed signatories who linger on mandates inherit lawsuits they never earned.
The stamp helps, the resolution helps, funds help most. Authority done correctly narrows liability to the genuine decision-makers; an account funded before cheques go out eliminates the question entirely.

For an SMB, the cleanest translation: treat every company cheque as a personal promise made on the company's behalf — because in the bounce scenario, that is precisely what the law makes it.

Adding and removing a signatory — the clean handover

Signatories change: directors join, accountants leave, a founder steps back. The mechanics are the same in both directions, and the removal matters more than the addition.

To add: the board passes a fresh resolution naming the new signatory and restating the mode of operation; the bank gets the certified copy, its mandate-change forms, the new signatory's KYC documents, and a specimen signature. Allow a few working days — the new signature isn't valid until the bank's records say so, which is exactly how the flawless director's cheque in our opening came back unpaid.

To remove: a resolution withdrawing the authority, filed with the bank the day the person exits — not the quarter after. An ex-employee who remains on the mandate can still sign cheques the bank will honour, and an ex-director who remains on it can still be dragged into a Section 141 complaint. Both are entirely self-inflicted. The best SMB habit is mechanical: signatory changes go in the same exit checklist as the laptop and the email account.

Once a year, ask the bank for the current mandate and read it against reality. The names that surprise you are the audit finding.

The signing-desk habits that keep it safe

Authority is the framework; day-to-day discipline is what actually protects the account. Four habits, none of them expensive:

Never sign a blank or partial leaf. The signature is the last field completed, after payee, amount, and date are on the paper. A signed blank cheque is an open mandate to whoever holds it — the entire threshold structure defeated by one lazy afternoon. The clean workflow is print-then-sign: batch-print the run with every field filled, then put the finished stack in front of the signatory.
Sign against a register. Every leaf the signatory signs gets a row — number, payee, amount, date — before it leaves the desk. When the bank statement and the register disagree, you want to know that week, not at year-end.
Remember the one cheque that's never signed. A cancelled cheque handed out for account verification carries two lines and the word CANCELLED — and no signature. An unsigned cancelled leaf is inert paper; a signed one is a liability searching for a photocopier.
Match the signature you filed. Banks compare against the specimen card, and a signatory whose signature has drifted over the years should refresh the specimen before the returns start.

None of this needs software, though software makes it effortless. What it needs is the recognition that a cheque signature is the single point where a business's money moves on one person's word — and that everything in this guide exists to make that word deliberate.

Every leaf your signatory signs, accounted for. Cheqify prints company cheques on 300+ Indian bank layouts with payee, amount-in-words, and date already filled — so your signatory only ever signs a finished instrument, never a blank — and its register logs every leaf against its payee for the annual mandate-vs-reality check. 100% free. Start at app.cheqify.app.