Change in Rules for Appointment of Whole Time Company Secretary and Scope of Secretarial Audit
MCA with vide notification dated January 03, 2019 has amended Rule 8A and 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 regarding Appointment of Whole Time Company Secretary and Scope of Secretarial Audit for Companies.
The Amended Rule shall be applicable from April 01, 2020 and same been inserted vide Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020.
Amendment
Rule 8A- Appointment of Company Secretaries in Companies Not Covered Under Rule 8
Every private company which has a paid up share capital of ten crore rupees or more shall have a whole -time company secretary.
Conclusion for Rule 8 and amended Rule 8A-
The following companies are mandatorily required to appoint Whole Time Company Secretary:
a. Listed Companies.
b. Unlisted Public Companies having Paid Up Share Capital of INR 10.00 Crore or more.
c. Private Companies having Paid Up Share Capital of INR 10.00 Crore or more.
Prior to amendment, Every Company (Private Company or Unlisted Public Company) having Paid Up Share Capital of INR 5.00 or more have to appoint Whole Time Company Secretary and by this amended rule now Every Company (Private Company or Unlisted Public Company) having Paid Up Share Capital of INR 10.00 Crore or more have to appoint Whole Time Company Secretary.
Rule 9- Secretarial Audit Report
For the purpose of Sec 204(1) of Companies Act, 2013, Every Listed Companies and following class of companies have to submit Secretarial Audit Report signed by Company Secretary in Practice Report with Board Report as per Sec 134(3):-
(a) Every public company having a paid-up share capital of fifty crore rupees or more; [or]
(b) Every public company having a turnover of two hundred fifty crore rupees or more; [or]
(c) Every company having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more.
Prior to amendment, Every Listed Companies and following class of companies have to submit Secretarial Audit Report signed by Company Secretary in Practice Report with Board Report as per Sec 134(3):-
(a) Every public company having a paid-up share capital of fifty crore rupees or more; [or]
(b) Every public company having a turnover of two hundred fifty crore rupees or more;
Conclusion for Rule 9
Every company (whether Private or Public) having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more have to submit Secretarial Audit Report signed by Company Secretary in Practice Report with Board Report as per Sec 134(3).
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