Role and Appointment of the Company Secretaries

A Company Secretary (CS) is a key managerial figure responsible for overseeing the compliance and legal functions of a company. The Institute of Company Secretaries of India (ICSI) governs the profession of Company Secretaries. To be recognized as a CS, one must be a member of the ICSI.

The core duties of a Company Secretaries include maintaining the company’s financial records, auditing tax filings, providing legal and financial advice to the board of directors, and ensuring that the company adheres to all statutory requirements.

Appointment Process of the Company Secretaries

According to Section 203 of the Companies Act, 2013, and Rules 8 and 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, certain companies are required to appoint Company Secretaries as part of their Key Managerial Personnel (KMP). These companies include:

• Listed companies with a paid-up share capital exceeding Rs. 10 crore.
• Public companies with a paid-up share capital exceeding Rs. 10 crore.
• Private limited companies with a paid-up share capital exceeding Rs. 10 crore.
• Unlisted companies with a paid-up share capital exceeding Rs. 10 crore.

The steps for appointing a CS are as follows:

1. Hold a board meeting by notifying all directors and passing a resolution to appoint a full-time company secretary.
2. Notify the Registrar of Companies about the appointment by filing Form MGT-14 and DIR-12 within 30 days of the appointment.
3. Update the company’s register of directors and key managerial personnel to reflect the appointment of the CS.
4. In the case of listed companies, inform the stock exchange where the company’s shares are listed.

Roles and Responsibilities of the  Company Secretaries

A Company Secretary (CS) holds an important position within a company and is responsible for carrying out various key functions outlined in Section 205 of the Companies Act. These include:

• Reporting to the board of directors on the company’s compliance with statutory regulations.
• Ensuring the company follows all applicable secretarial standards.
• Performing any other duties as assigned by the board of directors from time to time.

Duties of a Company Secretary

According to Rule 10 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a Company Secretary is required to:

1. Provide guidance to the company’s directors regarding their powers, duties, and responsibilities.
2. Facilitate and attend general, board, and committee meetings, as well as maintain the minutes of these meetings.
3. Secure necessary approvals from general and board meetings, government bodies, and other authorities as specified by the Act.
4. Represent the company before various regulators and authorities in matters related to the discharge of duties under the Act.
5. Assist the board in managing the company’s affairs.
6. Advise and support the board in meeting corporate governance standards and implementing best governance practices.
7. Carry out any other duties as specified under the Act or the related rules.

Process for Removing a Company Secretary

The process for the removal of a Company Secretary is as follows:

1. The board of directors can remove the CS by ensuring compliance with all terms of their appointment and recording the decision.
2. A resolution for the removal of the CS must be passed during a board meeting, with prior notice given to all the company’s directors regarding the removal or resignation.
3. The company must file Form DIR-12 with the Registrar of Companies within 30 days, along with the prescribed filing fees.
4. In the case of listed companies, the stock exchange where the company’s shares are listed must be informed.
5. Appropriate entries must be made in the register recording the details of company secretaries.
6. The company is required to fill the vacant CS position within six months by holding a board meeting.

1. Is it mandatory for all companies to appoint a Company Secretary?

No, it is not mandatory for all companies to appoint a Company Secretary. However, according to Section 203 of the Companies Act, 2013, all listed companies, public companies, and private limited companies with a paid-up share capital of more than Rs. 10 crore must appoint a full-time Company Secretary as a Key Managerial Personnel (KMP).

2. How is a Company Secretary appointed?

A Company Secretary is appointed by passing a resolution during a board meeting. After the appointment, the company must notify the Registrar of Companies by filing Forms MGT-14 and DIR-12 within 30 days of the appointment.

3. What are the primary roles and responsibilities of a Company Secretary?

The main responsibilities of a Company Secretary include:

• Ensuring that the company complies with statutory and secretarial standards.
• Advising the board of directors on legal, corporate governance, and financial matters.
• Organizing and attending board, general, and committee meetings, and maintaining minutes.
• Representing the company before regulators and government bodies.
• Assisting the board with managing the company’s affairs and ensuring corporate governance best practices.

4. Can a Company Secretary be held liable for non-compliance?

Yes, a Company Secretary can be held personally liable for non-compliance with statutory regulations, especially if they fail to fulfill their responsibilities related to legal, governance, or secretarial duties.

5. What qualifications are required to be appointed as a Company Secretary?

To be appointed as a Company Secretary, the individual must be a qualified member of the Institute of Company Secretaries of India (ICSI).

6. What happens if the position of a Company Secretary becomes vacant?

If the position of a Company Secretary becomes vacant, the company must fill the vacancy within six months by appointing a new Company Secretary in a board meeting.

7. How is a Company Secretary removed from their position?

The removal process involves:

• The board passing a resolution during a meeting to remove the Company Secretary.
• Notifying the Registrar of Companies by filing Form DIR-12 within 30 days of the removal.
• If the company is listed, notifying the stock exchange where the shares are traded.
• Updating the company’s register of Key Managerial Personnel.

8. Can a Company Secretary resign voluntarily?

Yes, a Company Secretary can resign from their position by submitting a resignation letter to the board of directors. The company must then file Form DIR-12 with the Registrar of Companies to formally record the resignation.

9. What role does a Company Secretary play in corporate governance?

A Company Secretary plays a vital role in ensuring that the company adheres to corporate governance norms. They advise the board on governance policies, oversee compliance with laws and regulations, and ensure that best practices in governance are followed.

10. Who is responsible for filing regulatory documents and returns in a company?

The Company Secretary is primarily responsible for filing regulatory documents, statutory returns, and compliance forms with government authorities, ensuring that the company meets its legal obligations.