COMPULSORY APPOINTMENT OF CS:
Since inception of the provisions of appointment of Whole Time Company Secretary ,this position always being treated as a significant position in the company. As per companies Act, 1956 Companies having paid-up capital 5 Crores or more was required to compulsorily appoint a CS in Whole time employment. Companies Act, 2013, in fact, has increased the position of a CS in whole time employment by designing this position as a KMP along with MD,CEO,WTD, CFO.
Notification No. G.S.R. 390E issued dated on 9th June 2014 by MCA mandates a company having paid up capital of Rs. 5 Crores or more shall appoint a Whole Time Company Secretary (Hereinafter called as ‘CS’). It is noteworthy to mention here that apart from CS, all other KMPs are applicable in case of company having paid up capital of Rs. 10 Crores .
(At the initial time of implementation of Rules the limit was 10 Crores & then amended by bringing down this limit for CS to 5 Crores).
THE POSITION OF CS IS A SIGNIFICANT ONE:
The significance of CS in whole time employment can be seen from the fact that among st all KMPs this is the only position where a special education, in the form of Membership of ICSI, is mandated. The legislators has kept their confidence on the membership of the ICSI as the crucial criteria to be appointed as a CS in a Company having paid up capital is more than 5 Crores.
HOW TO APPOINT A CS?
If the company has constituted a Nomination and Remuneration Committee under Section 177 of the Companies Act, 2013, then the committee shall identify suitable person capable to perform the Role of CS in the Company and send their recommendation to the Board.
If there is no such committee is formulated then the Board of Directors shall identify the candidate.
In practical scenario the HR department use to submit shortlisted Bio Data of probable candidate to the Committee or Board, as the case may be.
The candidate must be a members of the Institute of Company Secretaries of India and does not processes any disqualification.
Than the Board of Directors in their meeting appoint the CS by passing valid resolution.
WHAT ARE THE PRIMARY DUTIES OF A COMPANY SECRETARY?
Company Secretary, being the principal officer of the Company, is duty bound to maintain and supervise all legal viability of financial transactions, its compliances, relationship with the creditors, comply with the applicable provisions of Companies Act, Labour laws , FEMA, represent the Company before various authorities and directly report to the Board. He remains actively involved in strategic planning of the Company, checking compliance requirement and its implementation and reporting. Therefore it is his/ her primary duty to remain well versed with legal requirement of the country and to keep himself abreast of changes of law.
Section 205 of Companies Act,2013 read with The Companies (Appointment and Managerial Remuneration) Rules provides that the Company Secretary shall discharge the following duties, namely:-
(1) COMPLIANCE WITH THE ACT AND OTHER APPLICABLE LAWS:
(2) COMPLY WITH SECRETARIAL STANDARD:
(3) GUIDANCE TO THE BOARD AND DIRECTORS (collectively and individually):
(4) CONVENE, ATTEND BOARD, COMMITTEE & GENERAL MEETING:
(5) TO OBTAIN REQUIRED APPROVAL OF THE BOARD, SHAREHOLDERS:
(6) REPRESENT TO VARIOUS AUTHORITIES:
(5) TO ASSIST THE BOARD IN CONDUCTING AFFAIRS:
(6) To assist and advise the Board in ensuring good corporate governance and in complying with the corporate governance requirements and best practices; and
(7) To discharge such other duties as have been specified under the Act or rules; and
(8) Such other duties as may be assigned by the Board from time to time.
OTHER DUTIES:
(a) Along with other KMPs a CS is empowered to authenticate documents of the Company.
(b) As a CS is directly interact with the Board and being treated as a officer of the board they are usually responsible to communicate with the Stakeholders of the Company.
(c) They used to manage the Intellectual Property of the Company.
(d) SEBI Compliances: If he Company is a Listed Company or going to be listed then the CS has to comply all applicable SEBI Rules. SEBI (LODR) 2015 has mandated to keep a CS as the Compliances officer of the Company.
WHAT ARE THE KEY RESPONSIBILITIES OF A CS?
A CS is being treated a conscious keeper of a Company. He/ she has to keep his/ her ears open , so that all required compliances, due diligence are to be done with due expertise. It is his/her responsibilities to take pragmatic steps to keep the company fully compliant.
It is also their primary responsibility to keep themselves abreast of all the legal requirement and update the board on time.
HOW THE VACANCY TO BE FILLED UP?
If the office of any whole-time key managerial personnel, including CS is vacated, the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy.
HINDRANCES:
It is the responsibility of the Corporates to select a suitable candidate as CS and to adhere his/ her advice as given to the Board from time to time. He/she must be given scope to directly interact with the Board. As they are holding special education and training in the form of a membership of ICSI, the board must keep faith on the ability of the person, which in long term can save the company from statutory non- compliances, managing risk.
It is experienced that as a key members of KMPs the CS automatically become a party to all legal non- compliances, litigations, whether the offence occurs with his knowledge or not. Therefore it is the responsibility of the Board to include them in all the core teams of strategic planning , due diligence and implementations.
Author: CS Siddhartha Banik
(B.Com(Hons),FCS, LL.B)
Company Secretary
Email : pj_law_solution@yahoo.in; Mobile : +91-9899797126;
Author Bio
There is a lot of gap in What the title states (Importance Of Whole Time Company Secretary) and the write up under the title.