ALL INDIA FEDERATION OF TAX PRACTITIONERS has made a representation to Hon’ble Union Minister for Finance and Corporate Affairs and requested to Increase monetary limit for appointment of Company Secretaries from existing Rs. 5 Crore to Rs. 20 Crore at earliest As the limit of Rs 5 Crore Paid up capital was fixed more than 10 years ago i.e. w.e.f. 15-03-2009. Full Text of the representation is as follows:-
ALL INDIA FEDERATION OF TAX PRACTITIONERS
Head Office 215, Rewa Chambers, 31, New Marine Lines, Mumbai 400020
Email aiftpho@gmail,com Phone 022-22006342/ 49706343
25th June, 2019
The Hon’ble Union Minister for Finance and Corporate Affairs, North Block,
At the outset we convey your honour our Congratulations on becoming the Hon’ble Union Minister for Finance and Corporate Affairs. We would like to make the following recommendations for amendment in the Companies Act, 2013:
Requirement of appointing Company Secretary as per Section 383A : Section 383A was introduced in the Companies Act, 1956 by enactment of the Companies (Amendment) Act, 1974 which came into effect from 1st February, 1975. Accordingly, every company with paid up share capital of Rs. 25 Lac or more (at that time) was required to appoint a whole-time secretary. If any such company comprised only two directors, neither of them could be the secretary of the company. The said provision was subsequently amended by the Companies (Amendment) Act, 1988 which came into force from 1st December 1988 to empower the Central Government to prescribe the limit of paid-up capital for appointment of company secretary from time to time.
W.e.f. 15th March 2009 the limit of Rs 2 Crore Paid up capital was enhanced to Rs. 5 Crore vide Notification.
In this connection it may be noted that in 2013 when new Companies Act, 2013 was introduced, then initially Rs. 10 Crore Paid up capital was prescribed but after representation from some quarters, the said limit was fixed at a reduced amount of 5 Crores.
Problems : The Companies are facing great difficulty in getting whole time company Secretaries due to paucity and they are demanding huge remuneration taking advantage of scarcity. Companies are unable to upload INC Form 22A prescribed under the Companies Act, in absence of availability of whole time Company Secretary. The total number of companies having paid up share capital of 5 crore and more were 27785.as on 31st December,2014 which has substantially increased in last 5 years. In 2014 there were 15364 Private companies and 12421 Public companies having paid up share capital of 5 crore & more. The total number of companies were 27785.The current figure of companies having paid up capital of Rs.5 crore or more is estimated at more than 44,000. Majority of them are in practice.
Recommendation : As the limit of Rs 5 Crore Paid up capital was fixed more than 10 years ago i.e. w.e.f. 15-03-2009, in view of the difficulties being faced by Companies, the limit should be revisited and enhanced to Rs. 20 Crore at earliest.
Kindly consider the above suggestions. We assure your honour of our full co-operation in encouraging Corporates to make proper compliance.
|Dr Ashok Saraf
Co-Chairman Direct Taxes Committee