Who is a Company Secretary (CS)?
A company secretary is a certified professional who is a member of the Institute of Company Secretaries of India (ICSI), a legal professional organization in India that promotes, regulates, and develops the profession of company secretaries.
Scope of Work of CS:
A company secretary is appointed by a company as a key managerial personnel who is responsible for ensuring compliance with various corporate laws, including compliances under the Companies Act 2013, various regulations of SEBI, RBI, FEMA, and adherence to best corporate governance practices in the organization. They play a vital role in communication with various stakeholders of the company, including statutory bodies, courts, and tribunals on a day-to-day basis.
Role of a CS in the Business World:
In today’s business environment, every corporate in India is striving to adopt the best corporate governance practices for long-term survival and sustainability. Company secretaries serve as torchbearers for corporates to ensure adherence to corporate laws and governance practices. Proper compliance with laws and regulations and ethical practices in the organization reflect positively on the entity in the eyes of stakeholders.
Legal Framework for the Profession of Company Secretaries:
Provisions Pertaining to Appointment of a Company Secretary under the Companies Act 2013 and Regulations of SEBI:
Section 203 of the Companies Act 2013, read with Rule 8A of the Companies (Appointment and Remuneration of Key Managerial Personnel) Rules, 2014, provides that every private company having a paid-up share capital of Rs. 10 crore or more shall have a whole-time company secretary.
Section 2(51) provides recognition of a Key Managerial Personnel to a company secretary. As per section 2(51), a key managerial personnel means:
a. The Chief executive officer or the managing director or the manager
b. The company secretary
c. The whole-time director
d. The chief financial officer
As per regulation 6 of SEBI (Listing Obligations and Disclosure Requirements) 2015, a listed entity shall appoint a qualified company secretary as the compliance officer in the entity.
Section 204 of the Companies Act 2013 provides that every listed company and a company belonging to other classes of companies, as may be prescribed, shall annex with its Board’s report made in terms of sub-section (3) of section 134, a secretarial audit report given by a company secretary in practice, in such form as may be prescribed.
Regulation 24A of SEBI (LODR) Regulations 2015provides that every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex a secretarial audit report given by a company secretary in practice, in such form and manner as may be specified, and shall annex such report with the annual report of the entity.
Recently Issued Adjudication Orders by ROC for Non-Appointment of Company Secretary:
| ROC | Company Name | Penalty Amount | Order Date | Source |
|---|---|---|---|---|
| ROC Delhi | M/s. Alpur Solar Private Limited | Rs. 16,50,000 | 29.12.2022 | Read |
| ROC Telangana | M/S Turbotech Constructions Private Limited | Rs. 8.10 lakh | 28.02.2023 | Read |
| ROC J&K and Ladakh | M/s. Himalayan Rolling Steel Industries | Rs. 20 lakh | 24.04.2023 | Read |
| ROC Tamilnadu | M/s. Fair Deal Ventures Private Limited | Rs. 15 lakh | 14.06.2023 | Read |
| ROC Tamilnadu | M/s. Suvarnabhoomi Enterprises Private Limited | Rs. 25 lakh | 14.06.2023 | Read |
| ROC Patna | M/s. I2IT Private Limited | Rs. 10 lakh | 09.11.2022 | Read |
| ROC Hyderabad | M/s. Bacher Distributed Power India Private Limited | Rs. 9 lakh | 23.11.2022 | Read |
| ROC West Bengal | M/s. Ambica Shipping & Industries Limited | Rs. 20 lakh | 20.12.2022 | Read |
These are certain orders passed by ROC for the non-appointment of a company secretary, and there are many more orders available on the website of MCA.
Takeaway: Company secretaries play a crucial role in ensuring good governance and ethical practices in companies, which is essential for their long-term sustainability. Every stakeholder, especially investors, financial institutions, and the government, requires appropriate reporting of practices followed by the entity. Recognizing the importance of corporate governance, the Government of India has taken steps to attract foreign investors and enhance growth in the Indian economy by encouraging Indian companies to follow these principles.
Author Bio
Nice view.
Heartiest congratulations