Under the companies act, 20 the role of the company secretary has been considerably widened inasmuch as now he is not only responsible for the compliances under the company law but also in respect of compliances under all other applicable. Company secretary is a member of the icsi institute of company secretary of india. As the secretary is an officer of the company under section 11212 of the act, he or she may be criminally liable for defaults committed by the company. Understanding section 205 of the companies act, 20. Appointment of company secretary as per companies act, 20. To report to the board about the compliance with the provisions of this act. The role of the company secretary the companies act 2014 the act entered into force on 1 june 2015.
A secretary is under a duty to exercise due care, skill and diligence in the performance of his duties. The company secretary s duties are an essential ingredient in the implementation of sound corporate governance procedures maltas, 2000. Offence and penalty if a company contravenes the provisions relating to appointment of wholetime key managerial personnel which includes company secretary, the company shall be punishable with fine which shall not be less than one lakh. A company secretary is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for.
The functions of the company secretary shall include, a. The appointment of company secretary cs has been made mandatory under companies act 20 for a few class of the company like listed companies or company having paidup capital more than the 5 crore. According to the companies act, a company secretary means a company secretary as defined in sec 21c of the company secretaries act, 1980, who is appointed by a company to perform the functions of a company secretary under this act sec 224. Moreover, corporate governance is now actively being implemented in various corporate houses and is going to be compulsory by the government in a phased manner. Company secretary is a key managerial person in a company, responsible to ensure the effective and efficient administration of the company and. The principal duties and powers of company directors. Company secretary appointment, duties, rights, liabilities bba. Role of company secretary is to make sure to execute and implement the decisions take by the higher authorities like the board of directors of the company, chairman, ceos, etc.
In this article we will discuss and compare the provisions related to appointment of company secretary as per companies act 1956 and companies act 20. Cs works as an advisor by suggesting the role and power of. Duties of directors 5 difficult decisions or expose the company to risk. The act was a consolidation of various other pieces of company legislation, which applied only to companies incorporated under the act. While the companies act does not generally specify the role of the company secretary, they usually undertake the following duties. Appointment of key managerial personnel under companies.
A company has to comply with a lot of procedures as covered under companies act. Role and need of company secretary under companies act 20. It is the duty of the independent directors to acquire proper understanding of the business of the company, its nature and activities. The companies act, 20 has enhanced the role of company. S company law introduction 1 the term company is defined under which sec of the act. It is mandatory for every company having a paid up share capital of 5 crore or more to appoint fulltime company secretary who is member of institute of company secretaries of. Appointment of key managerial personnel under companies act, 20. The term director in companies act 20 under section 2 34 is defined as a director appointed to the board of a company. According to section 205 of the companies act, 20 the company secretary shall discharge following functions and duties, this is the first time that the duties of the company secretary have been specified in the company law. Under the companies act, 20 the role of cs company secretaries has increased by providing with the opportunities such as promotion, formation, and. Rights and role of company secretary under companies act toppr.
Maintaining the companys statutory books, including. However, the modern company secretary has an increasingly important role, which may include managing the office and entering into contracts on behalf of the. Private companies are no longer obliged to appoint a company secretary, although most companies continue to do so. Duties of independent directors as per companies act, 20 version. You are requested to join the service of the company on or before 16 th february. Key managerial personnel shall give details of his concern or interest in other associations, and all such details are to be included in the register required to be maintained under the companies act, 20. The requirement to appoint a company secretary in private limited company is governed by the provision of rule 8a and in public listed company by the provisions of rule 8 of the companies appointment and remuneration of managerial personnel chapter xiii under section 203 of the companies act, 20. The 20 act introduces a new type of entity to the existing list i. Rights and role of company secretary under companies act. The company secretarys duties include the following. Few roles and responsibilities of a company secretary. Section 205 of companies act, 20 functions of company.
Some of the key areas that have directly impact the role of company secretaries in employment or in practice due to this act are as follows. The companies act, no 71 of 2008 the act prescribes that all public and stateowned companies are required to have a company secretary. The role of the company secretary institute of directors iod. Role of a company secretary under companies act 20 ipleaders. Company secretary as the key managerial personnel and. A company secretary is an important organ of a company who performs various ministerial and administrative duties. Appointment of company secretary as per companies act 20. As per section 254 of the companies act, 20, a managing director means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its board of directors, is entrusted with substantial. Company secretary support disqualification case study. The present companies act has strengthened the role of company secretaries. Roles and responsibilities of a sg company secretary. Companies act of 20, which has already been notified partially, gives the concept of csr the importance it deserves. Key managerial personnel is prohibited from making forward dealings and insider trading in securities of the company. According to section 179, companies act 20, the power of directors of a company entitled to make any and all decisions, and thus exercise all the power, which the company has authority to enact.
Corporate social responsibility under the companies act, 20. The duties of a company secretary may be classified under the following broad heads. Trinity institute of professional studies sector 9, dwarka institutional area, new delhi75 statutory duties the statutory duties of a company secretary are those prescribed by the companies act or by any other legislation such as the income tax act, sales tax act, stamp act. The first of these duties is that a director must act within their powers under the companys constitution. Functions of company secretary effective from 1st april, 2014 1 the functions of the company secretary shall include, a to report to the board about compliance with the provisions of this act, the rules made thereunder and other laws applicable to the company. The board, as well as the chairman rely on the company secretary to advise them about their duties under the law, the corporate governance requirements, compliance with the listing rules and in conducting the legally required meetings in a timely and appropriate manner. A director is a person appointed to perform the duties and functions of director of a company in accordance with the provisions of the companies act, 20. Appointment of company secretary companies act 20 yourstory. As explained after the companies act, 20, the power of company secretary in india have broadened and more direct responsibilities have into effect. A study on appointment of company secretary under companies. This sets out the responsibilities of companies, directors and company secretaries. The company secretary role of company secretaries corporate governance and secretarial services corporate governance services. Roles and responsibilities of directors under companies. Xyz co, is having 10% share capital held by another public company and 35% held by central government and 55% held by people then that company is a government company b private company c public company d none of these 36.
Part 11 incorporation of companies and matters incidental thereto chapter i the companys memorandum and articles memorandum of association 3. Requirement to appoint company secretary in private limited company govern by the. Company secretary appointment, duties, rights, liabilities. The role of the company secretary institute of directors. Superiority ofact part ii incorporation and registration of companies 6. Managing director meaning role and responsibilities. A qualified company secretary, wellconversant with all the aspects of company management, is in a better position to give right advice to the board of directors. There is the also significant requirement and position of cs with the duties of company secretary under companies act 20.
Companies act, 20 bare acts law library advocatekhoj. Company secretaries oversee the efficient administration and compliance of a company. This an act to consolidate and amend the law relating to companies. Mar 02, 20 the companies act 1985 provides that a document signed by a director and the secretary of a company and expressed in whatever form of words to be executed by the company has the same effect as if executed under the common seal of the company. These 7 statutory duties are owed by each director to the company and form the basis of what being a company director is all about. The role of the company secretary has elements of both compliance and performance. But it is advisable to appoint a company secretary as kmp in the first board meeting which is to be conducted after applicability of such a provision. The companies act, 20 has been notified in the official gazette on 30th august, 20 but the provisions of this act shall come into force on such dates.
Duties and responsibilities of directors, auditors, company. In this article, we will discuss the existence of company secretary under the companies act, 20. The board of directors is the highest authority in any company. Under the companies act 2006, a company must keep certain records. Rights of a company secretary emanate from the companies act on the one hand and his service contract on the other. Section 188 lists the provisions of the act which the company secretary will be held responsible for, if contravened by the company. Company secretary as required under the companies act, 20 and such other duties that may be assigned by the managing director and board of directors from time to time. Whilst many of the provisions relating to company secretaries remain. The provisions pertaining to appointment of company secretaries are given under section 203 and the rules under chapter xiii of companies act, 20. Thus, company secretary means an individual who is a member of the institute of company secretaries of indiaicsi and is appointed to perform the function of a company secretary under the companies act.
Schedule vii contains a list of the activities which a company can undertake as part of its csr in initiatives. Extract from companies act, 2008 company secretary 86. According to section 21c of the company secretaries act, 1980, company secretaries are the people who are the member of the institute of company secretaries of india. In case a whole time directors wtd or a managing directors md of a non listed public limited company conviction is upheld by supreme court sc in appeal under criminal laws, what would be the position under of the companies act, 20 new act and rules framed there under. Section 171 is the primary section of the companies act that sets out the guidelines for a company. Meaning of company secretary under companies act, 20 firstly, for the meaning of the company secretary, the companies act refers to section 21c of the company secretaries act, 1980. Whilst many of the provisions relating to company secretaries remain the same under the new legislation, there are some interesting new. Companies act 20, duties of auditors, powers and duties of auditors, powers of auditors. The companies act 1985 provides that a document signed by a director and the secretary of a company and expressed in whatever form of words to be executed by the company has the same effect as if executed under the common seal of the company. The roles and responsibilities of a company secretary in singapore can be broadly categorized under three headers depending on whom he or she answers to. It is a prime requirement under section 146, that the company must send all. The companies act 2006 removed this requirement for private companies, although they can still have a.
While their formal legal duties see discussion above have not changed enormously in the last decade, their additional tasks have. According to the companies act, a company secretary means a company secretary as defined in sec 21c of the company secretaries act. In april 2008, as a result of the companies act 2006, the post became. The companies act, 20 has significantly increased the role and responsibilities of company secretaries each employed and in follow. Here are the various responsibilities and roles of a company secretary that ensure legal compliance for your company. Appointment of company secretary under companies act, 20.
According to section 88 of the act, the statutory duties of company secretary are. Company secretary role and duties company registration. Directors should observe the code of conduct of the company. The secretary is an officer of the company and their duties can be wide ranging.
In this code, unless the context otherwise requires, the expressions defined in the first schedule hereto shall have the meanings assigned to them in that schedule. A number of duties are imposed on the secretary by the companies acts however few are carried out. This article gives an overview of the role of the company secretary under the act, highlighting the key changes in the law. Directors are always in fiduciary relation with the company and other stakeholders and have fiduciary duties towards company. The companies act, 20 passed by the parliament has received the assent of the president of india on 29th august, 20. To perform duties with due and reasonable care and diligence. Mainly among the category are listed companies or company with a paidup capital of over rs. To act in accordance with the articles of the company providing that articles are subject to the provisions of this act.
Board of directors a company, though a legal entity in the eyes of law, is an artificial person, existing only in contemplation of law. The role of the company secretary in a modern company introduction in the modern era it is recognized that the company secretary is the most senior administrative officer of the company. Nov 25, 2019 after the companies act 20, the role of company secretary in india has become very important. In india, this position is defined under the companies act, 20. As per section 2 sub section 24 of companies act, 20. The company secretary is the compliance officer of the company. Nov 24, 2015 companies act, 1956 appeared to be ineffective at handling some of the present day challenges of growing industry and the interest of an increasing class of sophisticated stakeholders. Public company and public sector company both the companies are same. Companies act 1963 act 179 section 1commencement spent. The secretary s duties are mainly administrative, including preparation of the agenda for directors meetings. A corporate secretarial firm will provide the hiring company with a named company secretary.
Companies act, 20 promises to raise bar on governance and deal with. Companies act, 2011 lesotho legal information institute. Directors appointment, duties, rights, powers, liabilities. Maintaining the company s statutory books, including.
The company secretary comes to act as the grout to fill knowledge cracks that might otherwise appear during a board meeting handicott, 2002. Company secretary this document is integral part of company s code of conduct companies act, 20 schedule iv see section 1498 code for independent directors the code is a guide to professional conduct for independent. Sole traders, partnerships and limited liability partnerships were not covered by the companies act 2005. This article is written by ruchi jain, a student of mats law school, raipur, on the role of a company secretary under companies act, 20. The appointment of company secretary cs has been made mandatory under the companies act 20 for a few categories of companies.
For example failure to file in the time allowed any change in the details of the companys directors and secretary, or the companys annual return. The principal duties and powers of company directors in addition, where a person is restricted in acting as a director, the company must comply with certain capital requirements before he or she can so act. Apr 03, 2016 duties and functions of company secretary the duties of. As mentioned in section 203, the companies do not need to hire fulltime managerial personnel relying on the section of the company as mentioned by the center. The appointment of a company secretary in public companies and. Mandatory appointment of company secretary 1 a public company or stateowned company must appoint a company secretary. The companies act, 20 has considerably enhanced the role and responsibilities of company secretaries both in employment and in practice. Since calculated risk taking and risk exposure form an integral part of any business, the act includes a number of provisions to ensure that directors are allowed to act reasonably without constant fear of personal exposure to liability claims. However the promotion of the objects should be for the benefit of the company. A company secretary is defined in the act simply as an officer of the company.
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