Appointment of Company Secretary under the Companies Act 2013 and his Rights and Obligations
06 Apr 2015
Introduction:-
Company Secretary Appointment and his Rights and Obligations needs to understand the definitions and as per sub section 24 of section 2 of Companies Act 2013, Company Secretary means a Company Secretary define in clause C of sub section 1 of section 2 of the Company Secretaries Act 1980.And as per clause C of subsection 1 of section 2 of the Company Secretaries Act 1980 Company Secretary means a person who is a member of Institute of Company Secretary of India. Company Secretary is managerial personnel in a private sector company and in a public sector company. A Company Secretary is a person who can represent his company before any quasi-judicial body in relation to any legal dispute and other legal litigation.
Statutory guidelines for Appointment:-
As per section 203 of Companies Act 2013 every listed Company and every public company having paid up share capital of rupees Five crore or more shall have whole-time Company Secretary in employment. And as per section 203 of Companies Act 2013 above specified company also need to appoint whole-time-key managerial personnel and as per Section 2(51) of the Companies Act 2013 Company Secretary also covered under the definition of Key
managerial personnel.
If a company contravenes the provision regarding the appointment of Key Managerial personnel(K.M.P.) under Section 203 than the company shall be punishable with the minimum fine of rupees One lakh which may extend up to rupees Five lakh and every director and K.M.P. of the company who is in default shall be punishable with fine which may extend to rupees fifty thousand and if contravention is in continuing in nature than with a further fine of rupees one thousands for everyday after the first during which the contravention continues (sub section 5 of Section 203).
Procedure to be followed:-
Regulation 77 of table F provides that a Company Secretary may be appointed by the board of director and can fix the remuneration and condition as it may think fit.Generally board appoints the company secretary soon after the incorporation.Board of director may appoint Company Secretary by passing the board resolution in the meeting and execute a service agreement between Secretary so appointed and the company.
Steps to be followed for appointment of Company Secretary:-
Ø Resolution should be passed by the board of director in their board meeting.
Ø Agreement of service should be prepared.
Ø Details of Company Secretary must be recorded in the register of Key Managerial Personnel.
Ø A return in Form no DIR.12 shall be filed with the R.O.C. within 30 days from appointment and MGT 14 is also required to be filed along with fees.
Ø A return in MR 1 shall be filed with the R.O.C. within 60 days from the appointment.
*If such company is listed than give an intimation to all the Stock Exchange where the company’s securities are listed.
Rights of the Company Secretary:-
Company Secretary is a senior level officer. He enjoys the rights as per the agreement signed by him with the Company. Some rights areas follows-
· As a senior level officer Company Secretary can supervise,control and he can direct subordinate officers and employee.
· A Company Secretary 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 the company.
· Company Secretary can issue guidelines for the employees on behalf of the company.
· Company Secretary can attend meeting of shareholders and the meeting of board of directors.
· During Winding up he can claim his legal dues as a preferential creditor of a company.
· He can sign and authenticate the proceeding of meetings (Board, Annual general or extra ordinary general meeting) and other documents on behalf of the company where common seal is not required.
· Company Secretary is a Compliance Office rand concise keeper of the company and he has a right to blow whistle whenever he finds the conduct of the officers or of the directors of the company are detrimental to the interest of the company.
Statutory Responsibility of the Company Secretary under the Companies Act, 2013:-
The Companies Act, 2013 prescribed some responsibilities which are as follows:-
*Signing share certificate:-
Share certificate of the company should be sign by the two director out of which one should be managing director or whole time director and Secretary of the company or any other person duly authorized by the board.
*Signing annual return:-
As per Section 92 (1) of the companies act 2013 annual return to be filed with Registrar of companies has to be signed by a director and Company Secretary if company does not have a Company Secretary then the return can be signed by the Practicing Company Secretary.
* As Per Section 205 of Companies Act, 2013 the functions of company secretary include:-
· Report to the board about the compliance with the provision of Companies Act and all other applicable laws to the company and the rules made under the respective laws.
· And make sure that the company complies with the applicable Secretarial Standards issued by ICSI.
· And perform all other duties as may be prescribed.
Responsibilities of the Company Secretary:-
As per Companies(Appointment remuneration of managerial personnel) rule, 2014 the central government has prescribed following responsibilities:-
ü Company Secretary responsible to provide collectively and individually such guidance as may require by the directors of the company
ü Company Secretary is responsible for convening of meetings and attend these meetings and maintain the minutes of these meetings.
ü Obtain the necessary approval by the appropriate authority when required under the provision of company law.
ü Represent his company before any authority or quasi-judicial body and other authorities under the act in connection with discharge of various function under the act.
ü Assist the board and advise the board in ensuring the good governance and in complying with the requirement of good corporate governance.
ü Advise the board in relation to applicable laws.
ü And other duties as may be assigned by the board from time to time.
Note:-As per section 205 (2) provides that section 204 in relation to secretarial audit and section 205 in relation to functions of company secretary shall not affect the duties and functions of the director , managing director or whole time director under this act ,or any other law for the time being in force.
Responsibility as per Corporate governance:-
*In Audit committee:-
As per clause 49 of the listing agreement regarding corporate governance, Company Secretary will be the Secretary of the audit committee which is required to be formed by listed companies.
*Secretary as a compliance officer:-
Every listed company required to appoint the Company Secretary as a Compliance officer of the company who directly get in touch with SEBI, Stock exchange and the registrar of companies etc. (Clause 47 (a) of listing agreements)
*As per section 432 of companies Act 2013 A Company Secretary can appear before national company law tribunal (N.C.L.T.) on behalf of the company.
Conclusion:-
On the basis of above discussion we can say appointment of Company Secretary and his unique position in the company who is vested with bunch of legal rights and responsibilities as company secretary of any company. Company Secretary can add value to their role by making a good judgment and making quick accurate decision having commercial awareness in addition to their legal expertise.
Contact for any clarification at: [email protected]
HPACS Team
(Rishi Vashisth)