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 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 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 have 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.
The 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 full-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, it notifies 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.
The major duties of a Company Secretary include ensuring legal and regulatory compliance, managing corporate records, facilitating board meetings, advising on corporate governance, and acting as a bridge between the board, management, and stakeholders
A Company Secretary, being a multidisciplinary professional, renders services in the following areas:
#1. Corporate Governance Services
A Company Secretary furnishes significant recommendations on executing effective governance practices, ensuring compliance with corporate governance norms as specified in the Companies Act, Listing Agreements, and other pertinent laws and regulations. They support the companies in keeping the transparency, accountability, and ethical practices, thereby promoting shareholder trust and safeguarding the organization’s long-term interests.
#2. Corporate Secretarial Services
To set up a company and ensure it follows all legal requirements, a company secretary is important. They used to file the crucial documents, maintain track of official records, and organize board and general meetings, recording accurate minutes. They also handle share transactions, ensuring everything is managed in a facilitated and legal way.
#3. Corporate Laws Advisory Services
Corporate Laws Advisory Services assists businesses in comprehending and adhering to distinct regulations. Crucial advice on mergers, restructuring, protecting intellectual property, and creating contracts is provided by a company secretary. They lead the company in their rights and responsibilities under different laws, assisting them to prevent statutory issues and handle operations perfectly. The same assistance permits the businesses to align their methods and legal needs, lessens risks, and functions smoothly.
#4. Secretarial and Certifications under the Companies Act
Under the Companies Act, Secretarial services are directed to the crucial legal chores that the companies should complete, like filing required documents and reports. A significant role has been played by the company secretary via ensuring that all paperwork, along with the annual returns and financial statements, is been filed precisely and within time. They also assist with the proper appointment of the directors and the organization of the board meetings. Via furnishing such services, they assist companies to stay compliant with the law, lowering the risk of fines or legal problems and ensuring facilitated operations.
Read Also: How to Succeed in the Company Secretary’s Profession
#5. Representation Services
Representation services concern acting on behalf of a company in various legal situations, like meetings with government agencies or in court. Often, a Company Secretary serves as a crucial link between the company and these authorities, ensuring that the company complies with all legal requirements. This role may include representing the company during disputes or investigations and providing strategic advice on how to present its case effectively. By advocating for the company’s interests, the Company Secretary helps protect the organization in all legal matters.
#6. Arbitration and Conciliation Services
Arbitration and Conciliation services help companies in solving the issues quickly and affordably without proceeding through longer court procedures. A Company Secretary assists in streamlining these alternative methods to solve the clashes, guiding the way to start arbitration and manage agreements. By discovering the resolutions via such ways, the companies can keep good relationships and manage the disputes privately and efficiently, bypassing the negative consequences of public legal battles.
#7. Financial Markets Services
It gives directions on the way to function within the capital markets, which comprises trading stocks and other financial instruments. Also, a company Secretary ensures that the businesses comply with the securities laws and stock exchange rules. They support activities such as initial public offerings (IPOs) and raising capital, offering advice on legal compliance and corporate governance. This assistance supports the companies in developing their reputation and reduces the risk of legal problems, and taking benefits of opportunities in financial markets.
#8. Banking Services
A Company Secretary who furnsihes the banking services focuses on assisting the businesses in following the law of their banking and financial activities. It comprises managing relationships with banks, ensuring compliance with financial regulations, and delivering guidance on setting up banking facilities. They support in preparing the crucial documents for loans and credits, assisting in ensuring everything aligns with the laws of banking. The same services encourage clear financial procedures and support facilitated interactions between businesses and banks.
#9. Takeover Code and Insider Trading
Takeover Code and Insider Trading services navigate the companies via the norms they should comply with at the time of the mergers or acquisitions, ensuring that they comply with the appropriate trading practices. The information of the legal requirements specified by the regulatory bodies, along with monitoring insider trading, is provided by the company secretary to prevent any unfair advantage. For keeping trust in corporate transactions and avoiding practices that could harm the company’s reputation, it is important.
#10. Securities Compliance and Certification Services
Securities Compliance and Certification Services assure that companies satisfy all the regulatory norms pertinent to issuing, listing, and trading their securities. Necessary certifications are been furnished via the company secretary to validate the compliance with such norms. They assist with capital raising efforts and ensure that all important disclosures and filings are made to regulatory authorities. Through implementing the same, they assist the companies to keep the highest standards and prevent the penalites.
#11. Finance and Accounting Services
For businesses, Finance and Accounting Services are crucial to keep track of their money, to comply with the tax laws, and to provide accurate financial information. A Company Secretary assists by offering advice on managing finances, maintaining internal controls, and following accounting rules. The same comprises preparing financial reports, ensuring the business complies with accounting standards, and working with auditors to confirm that everything is reported properly. The company secretary, by handling finances effectively and staying compliant with regulations, helps companies avoid fines, be more transparent, and build trust with investors.
#13. Taxation Services
These services via a company secretary, ensure that a business complies with tax laws, handles what it owes in taxes, and takes advantage of tax benefits. Such services comprise advising on distinct tax cases, preparing tax returns, and ensuring compliance with tax regulations. A CS assists businesses in discovering the feasible tax deductions or exemptions and manages tax audits or disputes with tax authorities. They furnish guidance on international tax issues, ensuring that the company manages its tax responsibilities correctly.
#14. International Trade and WTO Services
Businesses are been guided by the International Trade and WTO Services via the rules and agreements pertinent to trading with other countries. A CS assists in navigating laws around importing and exporting goods, comprehending customs duties, and complying with international trade agreements. Such services ensure that businesses satisfy global standards and handle risks when dealing with foreign trade, helping them succeed in the international market while reducing potential trade disputes.
#15. Information Technology Services
Information Technology Services assists businesses in following the laws of technology and safeguarding data. A Company Secretary supports in managing IT systems and ensuring compliance with rules on data privacy and cybersecurity. Businesses are also been advised by them on compliance with rules on data privacy and cybersecurity. They advise businesses on e-commerce, intellectual property, and digital contracts. Via furnishing strategic IT advice, the company secretary assists businesses in using the technology, protecting crucial information, and meeting legal standards.
#16. General/Strategic Management
General/Strategic Management services assist companies in making long-term plans and rectifying their overall management. A company secretary furnsihes the guidance on corporate governance, managing risks, and decision-making. They support strategic initiatives like mergers, acquisitions, and market expansion. Through sharing the information on the best practices and compliance, the Company Secretary ensures that business strategies follow the law and are in line with the objective of the company, creating sustainable growth and good management.
#17. Corporate Communications and Public Relations
Corporate Communications and Public Relations services allow businesses to manage their reputation and communicate with stakeholders easily. A CS ensures that the company’s messages show its values and legal obligations. They support in handling communications during crises, corporate announcements, and public disclosures, promoting transparency. Media relations, engaging with stakeholders, and overseeing corporate social responsibility initiatives are some of its services. A perfect communication develops trust and makes the relationships stronger with the public.
#18. Human Resource Management
Human Resource Management services are concerned with adhering to labor laws and managing employee relations. Businesses are being supported by a company secretary who aligns their hiring and employment practices with statutory needs, covering recruitment, compensation, and workplace regulations. They support the creation of employment contracts, the management of disputes, and ensuring compliance with labor laws. A Company Secretary, via furnishing strategic HR advice, assists the organization in maintaining a motivated workforce and optimizing overall performance.
#19. 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 come 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 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.
