The Companies Act of 2013 mandates the appointment of a Company Secretary (CS) for certain companies. This article is an in-depth account of terms of administration processes of CS.
A Company Secretary (CS) is an important member of a company’s management team. A CS is in charge of the compliance and legal matters of a business. The organization that organizes and upholds the profession of company secretaries is called the Institute of Company Secretaries of India (ICSI). A CS is someone who is a member of the ICSI. Let’s discuss more on the Process of corporate secretary.
Maintaining the company’s books of accounts, reviewing the tax returns of the firm, counseling the board of directors on the legal and financial hazards of the company, and making sure the company complies with statutory rules are the key responsibilities of the CS.
Appointment Process of a Corporate Secretary
The following businesses are required to appoint a CS as a Key Managerial Personnel (KMP) in accordance with Section 203 of the Companies Act, 2013 (the “Act”) and Rules 8 and 8A of the Companies (Appointment and Remuneration of Managerial Employees) 2014 (the “Rules”).
- All publicly listed businesses have paid-up share capital exceeding Rs. 10 crores.
- A paid-up share capital of more than Rs. 10 crores is required for all public firms.
- any and all private limited corporations with paid-up share capital exceeding Rs. 10 crores.
- All unlisted businesses that have paid-up share capital of at least Rs. 10 crores.
The steps involved in appointing a CS are as follows:
- Call a board meeting, notify each director in attendance, and adopt a resolution naming a full-time company secretary.
- Within 30 days following the appointment date, submit forms MGT-14 and DIR-12 notifying the Registrar of Companies of the appointment of the corporate secretary.
- After the company secretary has been appointed, make the necessary entries and keep a proper register of directors and important managerial employees.
- In the case of a listed firm, notify the stock market where the company shares are listed.
- A corporate secretary may serve in a subsidiary company while serving in no more than one other business at once.
Entitlements of a Company Secretary
A Company Secretary may:
- Oversee, manage, and direct their staff members and subordinate offices.
- Subject to the authority of the Board’s delegation, a principal officer may sign any contract or agreement on the company’s behalf.
- For the benefit of the company, provide guidelines to the staff.
- Attend the Board of Directors and shareholder meetings.
- As a corporation is being dissolved, assert legal obligations as a firm’s preferred creditor.
- In cases where the organization doesn’t need to use its common seal, you can sign and verify papers like meeting notes.
- Be the organization’s concise keeper and compliance officer.
What Are The Responsibilities of a Company Secretary?
- CS as a Business Benefactor: The Companies Act grants a corporate secretary specific authority, including the ability to carry out company promotion and incorporation, handle company audit and certification services, sign annual returns, handle business transformation and takeovers, scrutinize reports and voting procedures in a transparent manner, administer revival of sick companies, join the Company Law Tribunal as a technical member, and conduct tax and corporate affairs investigations. This is one of the many responsibilities that portray the administration of the corporate secretary.
- CS as an Auditor: The Companies Act gives a company secretary the authority to annex a Secretarial Audit Report to the authorities in form MR-3 to ensure that the company complies with the policies set forth in general laws and legal acts and to report any egregious instances of fraud discovered to the government in order to ensure corporate discipline and compliance with the law.
- CS as an Advising Agent: CS serves as an advisor in cases involving the following: the issuance of shares; the drafting of proposals, sale letters, and other securities-related documents; private placement and buyback of shares; the raising of funds from international markets; the syndication and documentation of loans; income tax planning; the drafting of legal documents; matters relating to intellectual property rights; the direction of merger, amalgamation, and joint venture policies, among other things.
Role of a Corporate Secretary
Rule 10 specifies the CS’s responsibilities, which are as follows:
- Give the company directors any instructions regarding their rights, obligations, and powers that they may want.
- Organize meetings, attend board, committee, and general meetings, and take minutes at each one.
- Obtain the government’s, the board’s, and other essential authorities’ permissions as required by the Act’s provisions.
- Represent clients in matters involving the fulfilment of Act-related requirements before a range of regulatory organisations and other authorities.
- helping the board of the company run the business affairs of the company.
- Giving the board guidance and helping it to comply with corporate governance standards would ensure effective corporate governance and best practises.
- Fulfil any additional obligations outlined by the Act or regulations.
Conclusion
The position of company secretaries is expanding at a rapid pace in Indian organisations; as the number of compliances increases, the need for and responsibilities of CS cannot be overlooked. A corporation may face a multitude of penalties that only a corporate secretary may mitigate if it violates the requirements of the Companies Act and other authoritative laws.
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