A Company Secretary (CS) is a vital managerial role within a company, responsible for handling compliance and legal matters. The Institute of Company Secretaries of India (ICSI) oversees and upholds the standards for Company Secretaries in India. A CS is an individual who is a member of the ICSI. As it is the top qualification of company secretary in the country, the responsibility and role are very complicated and need channelized attempts to be displayed in a phased manner. A company secretary is developing a building block obligated for performing their roles and liabilities, to carry the integrity and legal compliance of the company. the below stated are the obligations or roles of a company secretary.
The key roles and responsibilities of the CS include maintaining the company’s financial records, auditing the company’s tax returns, providing guidance to the board of directors regarding legal and financial risks, and ensuring compliance with statutory regulations.
A Company Secretary, as defined in the Companies Act, is a person who is a member of the Institute of Company Secretaries of India (ICSI). This membership enables them to carry out various administrative responsibilities within an organization. In particular, Section 2(1)(c) of the Company Secretaries Act, 1980, explains this role and emphasizes the significance of their involvement in performing secretarial and administrative functions within the company.
After the Companies Act 2013, the role of the Company Secretary in India has become very important. There is also a significant requirement and position of CS with the duties of company secretary under the Companies Act 2013.
Required Qualifications For a Company Secretary
One is required to follow regulations set by the Indian Government, stated under Section 2(24) of the Companies Act, 2013 to become a Company Secretary (CS). The Companies (Secretary’s Qualifications) Rules of 1975 furnish additional needs. For Private Limited Firms:
- Membership in ICSI: The Company Secretary should be a member of the Institute of Company Secretaries of India (ICSI) if the company’s paid-up capital is Rs 50 lakhs or exceeding than that.
- Educational Qualifications: The Secretary must attain one or more of the specified conditions, which comprise being an ICSI member, holding a law degree from a reputable university, being a member of the Indian Institute of Cost and Works Accountants (ICMAI), securing a postgraduate degree in commerce from a reputed university, and possessing a Company Law Diploma from any India Law Institute.
Such needs established that the Company Secretary is well-qualified and compliant with the Government norms.
Process of Appointment of a Company Secretary
Section 203 of the Companies Act, 2013 (‘Act’) and Rules 8 and 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (‘Rules’), cited that the below-stated companies should appoint a CS as a Key Managerial Personnel (KMP):
- All listed companies with a paid-up share capital of more than Rs.10 crore.
- All public companies with a paid-up share capital of more than Rs.10 crore.
- All private limited companies with a paid-up share capital of more than Rs.10 crore.
- All unlisted companies with a paid-up share capital of more than Rs.10 crore.
Appointment procedure of a CS is as follows:
- By giving a notice to all the directors Convene board meeting and a resolution for appointing a whole-time company secretary must be passed.
- Notify the Registrar of Companies regarding the company secretary’s appointment by filing Form MGT-14 and DIR-12 within 30 days from the appointment date.
- Make essential entries and maintain an appropriate register of directors and key managerial personnel post company secretary appointment.
- In the case of a listed company notify the stock exchange where the company shares are listed.
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Few Roles and Responsibilities of A Company Secretary:
A company secretary is developing a building block obligated for performing their roles and liabilities, to carry the integrity and legal compliance of the company. the below stated are the obligations or roles of a company secretary.
1. Guide:
CS works as an advisor by suggesting the role and power of the chairman and director of the company.
2. Company Secretary Audit:
A CS ensures that the company follows the laws and guidelines explained in the memorandum to make the organisation function, as per the rules mentioned in Section 204 of the Companies Act, 2013. It is not only a role, but the duty of the CS to execute such audits of prescribed and listed companies.
3. Legal Advisor For Business:
The Company Secretary firm knows the company’s laws very well and works as a legal advisor for the executives. During the court of law matters, he advises on the company rights by taking deep subject knowledge from the expert.
Besides this, it is also important for a CS to follow these legal aspects:
- Furnishing the annual returns and forms according to the Companies Law.
- Helps the chairman and directors in implementing some guidelines effectively.
- CS check the legal necessities required for the equipment concerned to share certificates.
- Regulates the flow of dividends in a phased manner according to the laws followed by the company.
4. Link Between Inter and Intra Company Works:
A Company Secretary plays the role of connector between the investors, board of directors, and authorities who work in the direction of the company’s functioning and regulation.
Read Also: How to Succeed in the Company Secretary’s Profession
5. Keep Record Of Legal Works:
The professional company secretary of India maintains the information regarding investors, shares, directors, and members in a record.
6. Scheduling Company Meetings:
He is also responsible for arranging the shareholder’s and company board meetings. The articles of the company will work on the final needs for shareholder and board of director meetings, but it is the legal company secretary who is responsible for following the notice necessities, and dealing with any sort of furnishing or revising the records.
7. Maintaining Company Records:
The company secretary firm oversees the matter of maintaining some records of a company even if it is not strictly needed by the law. The responsibility comprises:
- Pension and Insurance detail
- VAT registration
- PAYE information
- Tax Record and Accountancy
- Statutory compliance records
8. Command Over Corporate Governance:
A structure of good corporate governance is important for companies irrespective of size, but it becomes difficult with a load of increasing stakeholders and company size.
In India, it is the Company Secretary advises the board of directors on corporate governance and the director’s duties. This comprises managing the interest area of the shareholders, issues of conflict of interest, investor guidelines and handling with applicable codes.
9. Company Statutory Register:
Companies must maintain certain statutory registers which include:
- register of directors;
- register of charges;
- register of allotments;
- register of transfers;
- register of members;
- minutes of meetings and resolutions;
- register of secretaries;
- register of directors’ interests;
- register of debenture holders;
- service contracts of directors;
- directors’ indemnities;
- minutes of meetings and resolutions;
- Documents of purchase or redemption of the shares out of the capital by a private company;
- Report to members the result of the investigation put by a company into an interest in its shares.
As explained after the Companies Act, 2013, the power of the company secretary in India has broadened and more direct responsibilities have into effect. As mentioned in section 203, the companies do not need to hire full-time managerial personnel relying on the section of the company as mentioned by the centre.
This is required to be done to make sure efficient governance and corporate regulation are working well. The important fact is to hire the CFO and CEO, the companies must appoint a Company Secretary professional, this describes the importance of the CS in the modern world.
