Company Secretary – A key managerial personnel of a company

  • Companies Act 2013 has introduced many new concepts and key managerial personnel is one of them. While the companies Act 1956 recognize only managing director, whole time director and manager.
  • The companies Act 2013 has brought in the concept of key managerial personnel which not only covers the traditional roles of managing director, whole time director but also include some functional figure heads like Chief Financial Officer and Chief Executive Officer etc. These inclusion are in line with global trends.
  • “Company Secretary” has also been brought within the ambit of key managerial personnel giving them the long deserved recognition of a key managerial personal of a company.
  • “Company Secretary” means a Company Secretary define in clause C of sub section (1) of section (2) of the Company Secretary Act 1980. Company Secretary means a person who is a member of Institute of Company Secretary in India.
  • Company Secretary is a managerial personnel in a private sector company or in a public sector company. A company secretary represents his company before any quasi judicial body in relation to any legal dispute and any other legal litigation

Statutory guidelines for appointment

  • As per section 203 of the company act 2013, Every listed company and Every public company having paid up share Capital of Rs. 5,00,00,000/- (Rupees Five Crore Only) or more shall have whole time Company Secretary in employment.

Steps to be followed for appointment of Company Secretary

  1. Resolution should be passed by the Board of Directors in their Board Meeting.
  2. Agreement of service should be prepared.

3. Details of Company Secretary must be recorded in the register of key managerial personnel.

4.  A return in form No. DIR12 shall be filed with registrar of Company within 30 Days from appointment and MGT  14 is also required to be filed along with fees and following documents.

  • Appointment letter
  • DIR2 ‘Consent of Directors’
  • DIR8 ‘Non disqualification of Director’
  1. A return in MR 1 shall be filed with registrar of company within 60 days from the appointment.
  • If such company is listed than give an intimation to all the stock exchange where the company securities are listed.

Procedure for appointment of Company Secretary

  1. Convene Board Meeting after giving notice to all the directors [Section 286]to discuss besides others the following matters.
  2. Approve the terms and conditions on which the Company Secretary is proposed to be appointed.
  3. Obtain a [written consent]from the person who is to be appointed as Company Secretary.
  4. Inform the Stock Exchange with which shares of the company are listed about the date of this meeting prior to the board meeting. [Clause 19 of the Standard Listing Agreement]
  5. Inform the said Stock Exchange within 15 minutes of the board Meeting, of the outcome of the meeting by letter or fax.
  6. File [e-form no 32] with the concerned ROC within 30 days from the date of Appointment
  7. Pay the requisite fee through Credit Card / by cash / by cheque in favour of “MCA Collection Account ICICI Bank” at the prescribed rates. [Fee Calculator]
  8. Make necessary entries in the Register of Directors/ Secretary. [Section 303(1)]

Rights of the company secretary

  • As a senior level officer company secretary can supervise, control and he can direct subordinate officers and employees.
  • A company can sign any contractor agreement on behalf of the company as a principle officer of a company subject to the delegation of power by the board of a company.
  • Company secretary can issue guidelines for the employees on the behalf of the company.
  • Company secretary can attend meeting of shareholders and meeting of board of directors.
  • During winding up he can claim his legal dues as preferential creditor of a company.
  • He can sign and authenticate the proceeding of meeting and other document of the company where common seal is not required.

Statutory Responsibility of the Company Secretary under the companies act 2013

  • Signing share certificate
  • Signing annual return
  • As per section 205 of the companies act 2013, the functions of company secretary include
  • Report to the board about the provision of companies act and other applicable laws to the company and make sure that the company complies with the applicable secretarial standard issued by ICSI.

Responsibility of the company secretary

  1. Advise the board in relation to the applicable laws.
  2. Company secretary is responsible for convening of meeting and attend the meeting and maintain the minutes of these meeting.
  3. Company secretary is responsible to provide collectively and individually such guidance as may require by the directors of the company.
  4. Obtain the necessary approval by the appropriate authority when required under the provision of company law.

Responsibility as per Corporate governance

  1. In audit committee
  2. Secretary as per compliance officer
  3. As per section 432 of the companies act 2013 – A company secretary can appear before National Company Law Tribunal (NCLT) on behalf of the company

liabilities of a company secretary

  • The liabilities of a company secretary, may be studied under two leads:
  • (1) Statutory liabilities, and (2) Contractual liabilities.
  • (1) Statutory liabilities :
  • a few statutory liabilities of the company secretary under different Sections of the Companies Act are listed below:
  • (a) Sections 39 :for failure to send copies of Memorandum and Articles, etc., to members within seven days of the requirement— fine upto Rs 50 for each offence.
  • (b) Section 75 :for failure of file with the Registrar a return of the allotments of shares within thirty days after the allotment— fine up to Rs. 500 for every day during which the default continues..
  • (c) Section 150 : for failure to maintain register of members with prescribed particulars – fine up to Rs. 50 for every day during which the default continues.
  • (d) Section 165 :for default in holding the statutory meeting and filing the statutory report fine up to Rs. 500.
  • (e) Section 168 :for default in holding the annual general meeting of the company— fine up to Rs 500 and in the case of a continuing default, a further fine up to Rs. 250 for every day after the first during which such default continues.
  • (f) Section 303 :for failure to maintain register of directors etc., with prescribed particulars fine up to Rs 50 for every day during which the default continues.
  • (g) Section 307 :for failure to maintain a register of directors’ shareholdings with prescribed particulars -fine up to Rs. 5,000 and also a future fine up to Rs 20 for every day during which the default continues.
  • (2) Contractual liabilities :
  • A company secretary has also certain liabilities arising out of his contract of service with the company. So long as he acts within the scope of his authority, in good faith, bona fide and take reasonable care in the discharge of his duties, he incurs no personal liability. But he will be held personally liable to make good the loss to the company for willful negligence, or misconduct or fraud committed within the course of his employment. He also becomes personally liable if he acts beyond his authority, for any loss suffered by the company or any third party on account of his action. However, he is not liable for fraud committed by his assistants unless his connivance is proved.