CA Selvaraj Selvakumar
We have good number of laws and regulations to govern corporates but in reality whether these corporates are really comply with law and a regulation is the matter debate coupled with complexities and penal consequences. A 57 years old company law states that certain registers and records to be made and maintained by the companies incorporated in India, the big corporates might have fatty financial basket but what about Small and Medium (SME sector) companies which are facing financial restrictions as well as compliance issues for want of professional advices.
There are many companies in the Register of Companies website which was created but not operated. Even after various schemes for closure of defunct companies offered by the ministry it is still not closed. I am able to see there are certain companies which must be operating but no filings with registrar of companies to the effect. In many cases, it is the mistake of the promoters as they are not approaching the professionals well before the tasks hence that lead to compulsion and consequential confusions to the entrepreneurs about proceeding further in their business.
As we are aware that companies having paid up capital of Rs.5 Crores needs to appoint a whole time company secretary under section 383A of Companies Act, 1956. Further is states that where the paid up share capital is Rs.10 lakhs or more then in that case the company is not required to employ a whole-time secretary but those companies are to get a certificate from a secretary in whole-time practice for their proper compliance with company law.
Now a day, inflationary trends are eating the profits of SME sectors and they may feel that having full time company secretaries are costlier. In my considered opinion, it is commercially viable to have a good practicing company secretary as retainer till the company’s paid up share capital exceeds Rs.5 Crores. Because, the law has 658 main sections and many subsections, Revised Schedule VI, Cost Accounting Records Rules, XBRL filings and Accounting Standard Rules and so on the list goes up.
Further the course curriculum of corporate secretary ship is such that it caters all the laws and regulatory needs of the company not only the company law but also labour laws, foreign exchange regulations which are vital to today’s competitive business. It is humble request that the Company Secretaries particularly those who have passed out recently and took challenge to become a vibrating CS Practice must concentrate on not only company law matter but also on FEMA regulations, RBI regulations, ESI/EPF formalities, Financial Reporting and analysis, get to know about Income-tax matters, VAT, Service Tax, Industrial Dispute Act, Bonus Act, Gratuity Act and so on in the bunch of Labour laws etc. Further have to update knowledge on technology improvements like XBRL filings etc.
The SME sector entrepreneur can make use of practicing CS’s skills to have good corporate compliance with all relevant laws on regular basis. Instead of engaging them at the year end, it is worth to have them regularly to have good control over various laws and regulations which is going to cut the profits on various milestones for want of non-compliance.
I feel that if professionals ready to take care of all laws and regulations and its proper compliance and maintenance of records at reasonable cost, the SME sector will grow also well.
The author is Chennai based chartered accountant he can be reached at gsvselvakumar@gmail.com
Dear Vignesh R
The very gist of this article is to expand the new avenue areas for CAs as traditional areas of CAs are no longer remaining viable due to penetration of IT. Now traditional accounting areas both financial and cost will be taken care of by CAs and the legal aspects and regulatory requirements will be by CS. So where is the room for Cost Accountants? Even ICAI succeeded in depriving ICAI-CMA to use Management tag in recent changed name of ICWAI to ICAI as the real fear of them is CWAs may encroach their areas. Now ICAI is supporting CS profession as long as ICSI is restricted to regulatory area of corporate and this is visible now as some CS are allowed to write in CA journal and sharing the dais in any function which was glaringly missing 1 year back. In this type of medium you can see a CA is mentioning and promoting and asking CV from CS. ICAI-CMA has to do solid research and publish in Cost Management area which will be much beneficial to the society at large and then claim their legitimate rights ultimately prove to be a force reckoned with.
A Very nice Article Sir.
Chennai based Practicing CS can mail their resume to gsvselvakumar@gmail.com
Nice article sir. Please also add the advantages of having a cost and management accountant for SME sectors since the important areas that an SME should concentrate includes cost reduction too.