IMPORTANCE OF COMPANY SECRETARY UNDER COMPANIES ACT, 2013
A company secretary is a senior position in a private sector company or public sector organization. The company secretary is responsible for the efficient administration of a company, particularly regarding ensuring compliance with statutory and regulatory requirements and ensuring that decisions of the board of directors are implemented.
WHO IS A COMPANY SECRETARY?
As per Section 2(24) of The Companies Act 2013, ‘company secretary’ or ‘secretary’ means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980, who is appointed by a company to perform the functions of a company secretary under this Act.
WHY ARE THEY APPOINTED IN A COMPANY?
A Company Secretary (C.S.) of a company has the primary responsibility to ensure compliance with statutory and regulatory requirements and for ensuring that decisions of the board of directors are implemented. There are several laws, statutes, regulations, etc. applicable to the company, which a Company secretary looks after and comply thereon. In India, A company secretary needs to be a member of the Institute of Company Secretaries of India. Only then she/he is eligible to appointed as Company Secretary of any company
Which companies are required to appoint a Company Secretary (C.S.)?
As per section 203 of the Companies Act, 2013 a Company Secretary (C.S.) is considered as Key managerial Personnel. And below given companies are required to appoint a Company Secretary (C.S.): –
a) Every listed company
b) every other public company having a paid-up share capital of ten crore rupees or more.
c) Every private company which has a paid up share capital of ten crore rupees or more shall have a whole -time company secretary.
WHAT ARE THE FORMS TO APPOINT A COMPANY SECRETARY (C.S.) IN A COMPANY?
All Companies are required to file E-Form DIR-12 for the appointment of a Company Secretary (C.S.). All Public Companies are also required to file Board Resolution in E-Form MGT-14 for the appointment of a Company Secretary as Key Managerial personnel (KMP). Both the above forms are required to be filled within 30 days from the date of the Board Meeting in which the appointment is approved.
RESIGNATION OF COMPANY SECRETARY (C.S.):
If a Company Secretary (C.S.) resigns, she/he can anytime resign from the company after giving notice as well as reason. The company will take the required steps for such resignation.It should be noted that the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy.
CONSEQUENCES OF NOT APPOINTING A COMPANY SECRETARY IN A COMPANY:
Any company which is mandatorily required to appoint a Company Secretary (C.S.) if doesn’t appoint, such company shall be liable to a penalty of five lakh rupees, and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.
For how long a Company Secretary (C.S.) can serve in a company?
A Company Secretary (C.S.) can be appointed for any number of years, it totally depends upon the management and already included in the appointment letter of Company Secretary (C.S.) stating his term, reasons for cessation etc.
What is the process to appoint a Company Secretary (C.S.)?
The following process is followed for appointment of Company Secretary (C.S.): –
a. Prepare notice of board meeting along with draft resolution(s) to be passed in the board meeting for candidate consideration for appointment as Company Secretary (C.S.).
b. Sending of Notice along with Agenda of Board meeting to all the Directors of company.
c. Convene board meeting and pass the following Board Resolution. d. Sending of Outcome of Board Meeting to Stock exchange wherever company’s securities are listed within 30 minutes from the conclusion of meeting. (this point is applicable for listed companies only)
e. Issue letter of appointment to the candidate for their appointment as Company Secretary (C.S.).
f. File e-Form DIR-12 along with attachments with the Registrar of Companies regarding appointment of director and simultaneously as a Company Secretary (C.S.) within thirty (30) days from appointment as Company Secretary (C.S.).
g. Sending of Appointment letter to Company Secretary (C.S.) and entry in register, minute books, etc of company.