The Institute of Company Secretaries of India (ICSI), via President CS Pawan G. Chandak, submitted a representation dated July 16, 2026, to Ms. Deepti Gaur Mukerjee, Secretary, Ministry of Corporate Affairs (MCA). ICSI requested an amendment to Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which currently requires a Whole-time Company Secretary in every private company with a paid-up share capital of ₹10 crore or more. ICSI proposes adding a criterion mandating a Whole-time Company Secretary for companies with outstanding borrowings (secured and unsecured) exceeding ₹50 crore at any time during a financial year. Highlighting that many private companies, start-ups, and closely-held entities operate with low paid-up capital but raise substantial funds, ICSI asserts that these companies handle significant financial exposure. ICSI justifies this by noting that a ₹50 crore borrowing threshold is already used under the Companies Act, 2013, for Audit Committees, Nomination and Remuneration Committees, and Independent Directors. The amendment aims to strengthen corporate governance, transparency, compliance, risk management, board processes, and secretarial standards in highly leveraged companies for the benefit of investors, creditors, regulators, and the corporate sector.
Institute of Company Secretaries of India
CS Pawan G. Chandak
PRESIDENT
G&CL: MCA: JUL:01/2026 | Dated: July 16, 2026
Ms. Deepti Gaur Mukerjee
Hon’ble Secretary
Ministry of Corporate Affairs
Government of India
New Delhi
Respected Madam,
Subject: Representation for amendment of Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
Greetings from the Institute of Company Secretaries of India!
At the outset, we would like to express our sincere appreciation for the continuous efforts of the Ministry of Corporate Affairs in strengthening the corporate regulatory framework and facilitating ease of doing business in India.
We wish to bring to your kind notice towards Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which mandates appointment of a Whole-time Company Secretary in every private company having a paid-up share capital of ₹10 crore or more.
Further, many companies including private companies, start-ups and closely-held entities operate with relatively low paid-up capital while raising substantial funds through borrowings from banks, financial institutions, debenture holders, related parties and other creditors. Consequently, such companies handle significant financial exposure and stakeholder interests but remain outside the existing requirement for appointment of a Whole-time Company Secretary.
ICSI Submission:
In this reference we respectfully submit for considering to amend Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 to introduce an additional criterion based on outstanding borrowings for mandatory appointment of a Whole-time Company Secretary as Companies with significant debt obligations are required to comply with numerous statutory, contractual and regulatory requirements, requiring continuous governance oversight.
The proposed rules may read as follows:
“Every company, other than such class of companies as may be specifically exempted by the Central Government having:
(a) paid-up share capital of ten crore rupees or more; or
(b) outstanding borrowings, including secured and unsecured borrowings from banks, financial institutions, debenture holders, related parties and other persons, exceeding fifty crore rupees at any time during a financial year, shall have a whole-time Company Secretary.”
Justification:
Appointment of a qualified Company Secretary in highly leveraged companies would:
- strengthen corporate governance and regulatory compliance;
- enhance transparency and accountability in dealings with lenders and creditors;
- reduce instances of non-compliance and governance failures;
- improve board processes, documentation and secretarial standards; and
- promote better risk management.
Also, it is worth mentioning that the existing regulatory framework under the Companies Act, 2013 already recognizes outstanding borrowings of ₹50 crore as a criterion for applicability of various governance requirements such as constitution of Audit Committee, Nomination and Remuneration Committee and appointment of Independent Directors for certain classes of public companies. Adoption of a similar threshold for appointment of a Whole-time Company Secretary would therefore be consistent with the existing legislative approach of linking governance requirements with financial exposure rather than only paid-up capital.
The Institute believes that the proposed amendment would significantly strengthen the corporate governance ecosystem by ensuring that companies with substantial borrowing exposure are supported by qualified governance professionals. Such a measure would be in the larger interest of investors, creditors, regulators and the corporate sector.
The Institute, therefore, again requests the Ministry to kindly examine the proposal and consider suitable amendments to Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
We shall be happy to provide any further information or clarification that may be desired in this regard.
Thanking you
Yours faithfully,
(CS Pawan G. Chandak)
President
The Institute of Company Secretaries of India
