Are you currently a practising company secretary who wants to be a director? If yes, then check out this article in no time!
To successfully run any type of business whether online or offline, you must comply with regulations. The laws that govern and direct the way businesses are started and managed vary from jurisdiction to jurisdiction. But there are general elements within the law that may apply to all states. It is possible to ignore or overlook certain provisions of the law, but as they say, “the law always catches up with you. Some rules may appear stringent or even unnecessary, however as your business grows and you start facing legal changes from business associates and government agencies regarding different transactions or dealings, that is when you realise the importance of following regulations. Know Can a Practising Company Secretary be the Director in this blog.
Before we delve into the gist of the matter of hand-how a practising company secretaries can be a director, let’s take a deeper look at what this position is, how is it relevant or important to the daily operations of the business, the qualifications required for one to be a company’s secretary, and the processes through which a person is appointed or recruited to the position. We’ll take a look at who a company director is, examples of roles they play in a company, the qualifications required for one to be a company director, and finally the process for appointing or naming a direction. This will give you a clear understanding of whether a practising company secretaries can be a director or not.
Who is a Company Secretary and What is He/Her Role?
When you hear anyone mention the word secretary the first thing that comes to most people’s mind is someone who writes company messages, handles documents, and also assists the director or manager. Over the years, the role of the secretary has changed a lot, they don’t only take notes during meetings as it was in the past, they perform a lot of administrative work for the company. A company secretary is the person appointed or employed to provide administrative oversight over the company. In corporations, the board of directors acts as their point of contact.
Secretaries do more than just clerical work, they are responsible for ensuring that the company complies with all laws and regulations, they also work with management teams to make sure board decisions are implemented, keeping company documents such as certificate of incorporation, memorandum, and articles of association, and many other duties. The role of the secretary varies from company to company. The larger the company or institution, the higher the level of roles the practising company secretary plays. In a small business or sole proprietorships, secretaries may offer mainly clerical work like taking notes or minutes in meetings.
There is no special qualification required for someone to be a company secretary. They should have a wide range of skills including corporate law, governance, and administrative skills. Secretaries could be employed or appointed depending on the circumstance. When a company is just being registered, a secretary may be appointed and included in the process. A secretary could also be employed through recruitment processes, they could also be appointed by suitable employees within the company.
The main responsibility of the secretary includes establishing the company’s official office, administering company documents, keeping vital company documents, organising and summoning meetings for directors, and maintaining the legal existence of a company.
Private companies are not required by law in most jurisdictions to appoint a secretary. However, there are cases where the articles of association of the company stipulate that it should have a secretary. Public companies on the other hand are required by law to have a practising company secretary.
Who is a Company Director and What Role Do They Play?
The word or term director refers to the title or position held by an individual or group of individuals at the senior management levels of a company. The size of a company largely determines the number of directors and their roles. In multinational companies, you’ll find directors responsible for managing different areas of the company. They are charged with managing and supervising the sectors that fall under their purview. In most private and public companies, some individuals are appointed to oversee the general affairs of the organisation. They may be referred to as the board of directors or simply directors. In most private companies, the founder of the company becomes the director and may appoint other people to assist.
Directors play key roles, according to the structure of the practising company secretary. Where there are department directors, they help to supervise managers to ensure that they perform according to the company’s strategic plan. The Board of directors oversees the performance of the general company. They are responsible for giving the company direction.
Company directors must be experienced in management and have a proper understanding of business operations. They may also be expected to have a degree in business or a related field. Appointment of director in a company is either at the time a company is being started or later when operations increase.
Both private and public companies are required by law to have two or more directors. Public companies should have at least three directors while private companies should have a minimum of two directors for the case of private limited companies, and one director for single-owned companies.
Can Practising Company Secretaries Be Directors?
According to the company Act, 2013 an employee of a practising company secretary is not prohibited from becoming the director of the same company. However, they can only be non-executive directors, which means they will not receive a fixed salary except for the allowances they are offered per every board sitting. Non-executive directors are the most senior management level of the company, they normally make up the board members.
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Conclusion
Company secretaries play a key role in the daily running of the organisation, from administering governance and making sure the company complies with legal and regulatory issues. Company secretary can be appointed at the time the company is being registered or as and when the need arises. No provision was included in the company act that prohibits a current employee of a company from becoming a director, there shouldn’t however be a conflict of interests in cases where they are serving as directors of more than one business under the same company. Click here to get practising company secretary services in India.
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