Do you want to learn about how to appoint or remove a company secretary? Would you like to know the duties of a CS? This article was prepared to help you understand the process of appointing a practising CS.
A company secretary performs an important role that pertains to the smooth running of the organisation. The main duty of a company secretary is to make sure the business or organisation operates according to the law. They put in place measures to comply with standard regulations and maintain the company’s legal status. According to the company Act 2006, a company’s secretary is referred to as the organisation’s office, just like the director. Here blog tells us about Getting a Practising Company Secretary for Small Limited Companies.
Although company secretaries perform a wide range of roles, their main responsibility is ensuring the company works or operates according to required statutory, legal, and financial regulations. This is one of the reasons why private companies appoint or employ secretaries even though they are not mandated to do so by law. In situations where a company has no designated secretary, the director undertakes these responsibilities, or someone may be authorised to perform these tasks on behalf of the director.
Common Roles of a Company Secretaries
The duties of Company secretary in India vary from company to company, according to the size and type of ownership. Private companies are run differently from the way public companies are operated. Even though the role of company secretaries may vary, they have core functions similar to most companies, no matter the size or type of ownership. Below are some of the typical roles of company secretaries.
- Administering all company documents, including the routine filing of documents related to changes in capital share, changes in the articles of association, resolutions made by board members, and notice of appointments and changes to the same. The secretary is also the custodian of documents such as the company seal, memorandum and articles of association, certificate of incorporation, and share certificates.
- The secretary also organises and summons directors and shareholders for meetings. They are responsible for publishing meeting notices, setting agendas as deemed fit by all members, and doing clerical work like preparing minutes for the meeting. It also includes recording resolutions and other decisions agreed upon. They also ensure that such meetings are conducted according to the articles of association and other mandatory regulations.
- In some instances, the company secretary services will be required to establish, register, and maintain the company’s official address.
- The company secretary also helps the board and shareholders to follow business practices that observe regulations, for example, acting within the provisions of the Act and other government regulations.
- The secretary must guide directors on their roles and the extent to which they can discharge the same.
- The CS is also responsible for ensuring that all standards.
- The CS’s responsibility is to prepare and file company account reports.
How Is a Company Secretary Appointed?
According to the Companies Act, some categories of companies are required by law to appoint a secretary. These include public companies with paid-up share capital, listed companies, private limited companies, and unlisted companies with paid-up share capital. All required companies should have paid up share capital above Rs. 10 core.
To appoint a company secretary, the following procedure must be undertaken:
- A board meeting must be organised involving all company directors. A meeting notice is issued to all board members. Once the meeting is convened and a resolution is passed to appoint a company secretary, they should be whole-time.
- The registrar of companies must be notified of the same by submitting the DIR-12 and MGT forms. These documents should be filed within 30 days after the secretary is appointed.
- If the company is listed, the stock exchange must also be informed when a secretary has been appointed.
- CS appointment is the duty of the company board of directors. Suppose a public company fails to comply with the legal requirement to appoint a CS. In that case, the state secretary can appoint a date within which it should be done. If the company directors fail to meet this deadline, they will be found in contempt and may risk fines or prosecution in law courts.
- The secretary shouldn’t necessarily be a person, and it could be a corporate entity. The company auditor cannot be appointed as the secretary.
- The CS should have some of the following skills: extensive knowledge of corporate law, governance, company administration, and strong communication skills.
How Can a Company Secretary Be Dismissed or Removed From Office?
The first step in removing a company secretary is ensuring all processes and termsof appointment are followed and recorded. If this is not done correctly, you may expose the company to liabilities and lawsuits, especially in cases where the company secretary is removed due to disputes.
A board meeting must be convened, and all board members should be notified. During the meeting, a resolution to remove the company secretary was passed. The same process is followed in cases where the company secretary decides to resign voluntarily.
After the resolution has been passed, the registrar of companies must also be notified of the same by submitting a DIR-12 form. This should be done within a timeframe of 30 days. You’ll also be required to pay a small fee for filing the form.For the case of listed companies, you are also required to notify the stock exchange upon removing the company secretary. Once the CS has been removed from office, the company is required by law to find, appoint, and file the replacement within a timeframe of 6 months from the time the board passed the resolution to remove the CS.
Conclusion
Regardless of whether it is a public or private company, the position of the CS (company secretary) is key; as such, before a person is appointed to this position, they should be critically assessed. The secretary performs duties that ensure the company’s smooth running; they help administer company documents and advise the board of directors regarding corporate law and statutory obligations. This is critical because any failure or negligence on their part may expose the company to costly fines. In the worst cases, it could lead to the company’s closure. Click here to learn about Company Secretary Services in India.
Suppose you are looking to appoint a secretary for a public or private limited company. In that case, it is important that you carefully follow all requirements as stipulated in the Company Act. This is not easy, especially if you have no background in law; that is where Vakilsearchcomes in handy. You can find there all resources you need to properly understand the process of appointing and removing a company secretary if you could also make an appointment with a lawyer to guide you through the entire process.
