Understanding Section 113 of the Companies Act, 2013: Representation of Corporations
Corporate governance sounds like a heavy, legal phrase—and honestly, it often is. But once you step into real-world company operations, you realize governance is not just about laws and compliance checklists. It’s about making sure decisions don’t get stuck simply because the right people couldn’t be physically present.
This is exactly where Section 113 of the Companies Act, 2013, becomes extremely practical.
I’ve seen many companies—especially holding companies, group structures, and investment entities—struggle with meeting participation. Board members are travelling, directors are unavailable, or the company itself is a shareholder in another company. So the question arises: How does a company attend a meeting?
The law answers this neatly through representation of corporations, allowing a body corporate to appoint a human representative who can legally speak, vote, and act on its behalf.
Let’s break this down in simple language, without legal jargon, and with real-world clarity.
What Is Section 113 of the Companies Act, 2013, Really About?
At its core, Section 113 of the Companies Act, 2013, exists to solve a very practical problem:
A company is not a person. It cannot walk into a meeting.
Yet companies often hold shares in other companies, lend money, or participate as creditors. When meetings are called—whether general meetings or creditor meetings—someone must represent that corporate interest.
This section legally allows a body corporate to:
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Pass a board resolution
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Appoint an authorised representative
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Grant that person the same rights as the company itself
Once authorized, the representative can fully participate in corporate decisions without any legal doubt.
Why Representation of Corporations Is So Important in Practice
In theory, meetings are simple. In practice, they’re messy.
Here’s a common scenario I’ve personally encountered:
A private limited company holds 30% shares in another company. An extraordinary general meeting is called to approve a major restructuring. None of the directors of the shareholder company can attend due to prior commitments.
Without representation of corporations, that shareholder loses its voting power entirely.
Section 113 of the Companies Act, 2013, ensures this never happens.
By appointing a representative, the company remains active, informed, and legally present—without delaying decisions or risking non-compliance.
Who Can Appoint a Representative Under Section 113?
Only a body corporate can invoke this section. This includes:
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Companies (private or public)
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LLPs acting as creditors (where applicable)
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Holding or subsidiary companies
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Corporate shareholders
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Institutional investors structured as companies
Individuals cannot use Section 113. This provision is strictly meant for corporate entities, not personal shareholders.
Board Resolution: The Legal Backbone of Section 113
Everything under Section 113 of the Companies Act, 2013, starts and ends with a board resolution.
Without it, the representative has no authority—no matter how senior or trusted they are.
What a Proper Board Resolution Should Include
A valid board resolution must clearly mention:
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Name of the authorised representative
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Name of the company being represented
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Purpose of representation
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Powers granted (discussion, voting, proxy, postal ballot)
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Validity period (specific meeting or ongoing)
This resolution acts as written proof that the company has consciously authorised someone to act for it.
From a compliance perspective, this document is non-negotiable.
Who Is Usually Appointed as an Authorised Representative?
While the law allows flexibility, companies usually appoint someone who understands corporate matters well.
Common choices include:
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Directors
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Company Secretaries
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Senior finance or legal managers
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Compliance officers
The idea is simple: the authorized representative should be capable of understanding resolutions, asking relevant questions, and voting responsibly.
Choosing the wrong person can lead to poor decision-making or even disputes later.
Rights of the Authorised Representative Under Section 113
Once appointed, the representative steps fully into the company’s shoes.
Under Section 113 of the Companies Act, 2013, the representative enjoys:
1. Voting Rights
They can vote exactly as the company would have—on ordinary or special resolutions.
2. Participation in Discussions
They can speak, raise objections, seek clarifications, and participate meaningfully.
3. Voting by Proxy
Yes, the representative can even vote by proxy if allowed.
4. Postal Ballot Rights
The representative can cast votes through postal ballot wherever applicable.
Legally speaking, their actions are treated as actions of the company itself.
General Meetings and Creditor Meetings Explained
Section 113 of the Companies Act, 2013, applies to both:
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General meetings (AGMs, EGMs)
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Creditor meetings (debt restructuring, compromises, arrangements)
This is especially useful in restructuring cases, where corporate creditors must approve schemes. Instead of senior executives attending every meeting, a properly authorised representative can handle the responsibility efficiently.
Real-Life Example: How Section 113 Saves Time and Cost
Let me give you a realistic example.
A holding company owns shares in five subsidiaries across India. Each subsidiary calls at least two general meetings a year.
Without representation of corporations, directors would have to physically attend ten meetings annually—travel, accommodation, and time loss.
Using Section 113 of the Companies Act, 2013, the holding company appoints a single authorized representative through a board resolution.
Result?
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Zero travel stress
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Full legal compliance
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Faster decision-making
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Proper documentation
That’s governance done smartly.
Common Mistakes Companies Make Under Section 113
Despite being straightforward, mistakes still happen.
1. No Board Resolution
Verbal authorization has no legal value.
2. Vague Authority
If voting rights are not clearly mentioned, disputes can arise.
3. Wrong Person Appointed
Someone without corporate knowledge can harm company interests.
4. Poor Record-Keeping
Lack of documentation invites legal challenges.
Avoiding these mistakes is as important as understanding the law itself.
Compliance Best Practices for Companies
To use Section 113 of the Companies Act, 2013, effectively, follow these tips:
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Always pass a board resolution in advance
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Clearly define the scope of authority
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Keep signed copies ready for inspection
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Ensure the representative understands the agenda
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Maintain records in statutory files
These small steps prevent big compliance headaches later.
How Section 113 Strengthens Corporate Governance
From a governance standpoint, representation of corporations ensures:
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No shareholder is silenced due to absence
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Corporate democracy functions smoothly
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Decisions are taken on time
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Legal validity is maintained
It bridges the gap between law and practical business realities.
Is Section 113 Mandatory or Optional?
This is important.
Section 113 of the Companies Act, 2013, is not mandatory. It is an enabling provision.
Companies may appoint a representative when required. But once they choose to do so, full compliance becomes mandatory.
Final Thoughts: Why Section 113 Truly Matters
In my experience, laws like Section 113 of the Companies Act, 2013, don’t just exist to add paperwork. They exist to make business smoother.
By allowing a body corporate to authorize such person as it thinks fit to act as its representative, the law acknowledges modern corporate complexity.
Whether it’s voting, discussions, or compliance, representation of corporations ensures that companies never lose their voice simply because of logistics.
If you’re part of a group company, investment entity, or corporate creditor, understanding and using this provision correctly can save time, cost, and legal trouble.
For professional support with board resolutions, corporate compliance, and Companies Act matters, platforms like Callmyca.com help businesses stay compliant with confidence—without confusion.
