Appointment of Company Secretary

Appointment of Company Secretary
25 August 2020

Appointment of Company Secretary

A company secretary is principally an employee even though he holds a very high rank. He / She may be the Chief Executive & then his position is near to those of the directors. In reality, he is the only employee who has advisory powers.

CS advice is pursued in carrying out general administration and in the decision-making process at the time of framing policies of the company. He is consulted to determine the lawful suggestions of policy decisions. Therefore, he/she is the only outsider who is present at the Board meetings.

Company Secretary is the person who is a member of the (ICSI) Institute of Company Secretary of India appointed by the company to perform the functions of the Company Secretary.

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

Who can appoint CS?

As per Section 203 of The Companies Act 2013, Every listed company and every other company having paid-up share capital of rupees 10 crores or more shall have a whole-time company secretary on their board.

However as per the recent amendment in Rule 8A of Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 –

  1. 8A Appointment of Company Secretaries in Companies Not Covered Under Rule 8
  2. Every private company which has a paid-up share capital of ten crore rupees or more shall have a whole-time company secretary.

As per the directions given by RBI,

  1. Every bank whether listed or otherwise shall mandatorily appoint a company secretary in their board.
Process of Appointment of Company Secretary
  1. After giving proper notice, a board meeting should be conducted where necessary resolutions are passed for the appointment of a company secretary.
  2. The person appointed as the company secretary should give written consent to act as the same.
  3. After the meeting, an appointment letter should be given to the company secretary so appointed.
  4. The company should file Form DIR 12(necessary documents to be attached) with ROC within 30 days of the appointment.
  5. Also, inform the stock exchange within 30 minutes of the conclusion of the meeting.
Duties of Company Secretary

The duties of Company Secretary are as follows:-

  1. to provide necessary guidance to the directors of the company with regard to their duties, responsibilities, and powers;
  2. to facilitate the convening of meetings and attend Board, committee and general meetings and maintain the minutes of these meetings;
  3. to obtain approvals from the Board, general meeting, the government and such other authorities as required under the provisions of the Act;
  4. to assist the Board in the conduct of the affairs of the company and in ensuring good corporate governance.
  5. such other duties as may be assigned by the Board from time to time.
Offenses & Penalties as per Section 203 of The Companies Act 2013

If any company makes any default, 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.