“COMPANY SECRETARY- ROLE, DUTIES, AND RESPONSIBILITIES UNDER

COMPANY LAW”

A PROJECT OF ‘PAPER -9.4, LAW RELATING TO CHILD’ SUBMITTED IN

PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF
B.A.LL.B. (H) (SEMESTER-IX) IN HALDIA LAW COLLEGE OF VIDYASAGAR
UNIVERSITY

UNDER THE GUIDANCE AND SUPERVISION OF

NIRUPAM BHATTACHARYA
Assistant Professor -in- Law
HALDIA LAW COLLEGE

SUBMITTED BY
SAJAHAN MOLLA

REGISTRATION No. 0001482 0F 2016-2017

Roll: 60530116 No.: 5068

HALDIA LAW COLLEGE

(A PREMIER LEGAL INSTITUTION OF ICARE)
ICARE COMPLEX, P.O.: HATIBERIA, HALDIA
DIST.: PURBA MEDINIPUR
WEST BENGAL, INDIA

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 ACKNOWLEDGEMENT

A project is a joint endeavor which is to be accomplished with utmost compassion, diligence and
with support of all. I am overwhelmed in all humbleness and gratefulness to acknowledge from
the bottom of my heart to all those who have helped me to put these ideas, well above the level
of simplicity and into something concrete effectively and moreover on time.

This project would not have been completed without the combined effort of my teacher, Mrs.
NIRUPAM BHATTACHARYA, Assistant Professor-in-Law, Haldia Law College whose support and
guidance was the driving force to successfully complete this project. I express my heartfelt
gratitude to him.

I am also thankful to Dr. P. k. Sahoo (Principal) and other faculty members for their
encouragement, support and inspiration both for completion of this work and for the course
study. I am equally thankful to Mr. Samir Kumar Panda (Librarian) and other staff of the
College.

I owe the present accomplishment of my project to my friends, who helped me immensely

with sources of research materials throughout the project and without whom I couldn’t have
completed it in the present way.

I would also like to extend my gratitude to my parents and all those unseen hands who helped
me out at every stage of my project.

SAJAHAN MOLLA

Place: Haldia Law College Signature

Date: 23/09/2020

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 DECLARATION

I am SAJAHAN MOLLA this project report is my original work and have not been submitted
in any form as a part of any other project.

Information derived from the published and unpublished work of other has been
acknowledgement in the list references in given in the bibliography.

SAJAHAN MOLLA
Place:Haldia Law College Signature
Date: 23/09/2020

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 CERTIFICATE

This is to certify that the project on the topic “COMPANY SECRETARY- ROLE, DUTIES, AND
RESPONSIBILITIES UNDER COMPANY LAW”

NAME: - SAJAHAN MOLLA

Registration Number:-0001482 0F 2016-2017

Class Roll No: - 68

During 8 Semester of the B.A.LL.B course on Haldia Law College, under my guidance and have
th

been completed it successfully.

Place:Haldia Law College Signature

Date: 23/09/2020

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 Contents
P.G.NO
Chapter 1
1.1. Introduction…………………………………………………………………………………………………………06
2.2. Company secretary………………………………………………………………………………………………06
2.3. Company secretary in India………………………………………………………………………………….06-07
Chapter 2
2.1. Appointment of company secretary as per companies act 2013………………………….08
2.2. Qualifications……………………………………………………………………………………………………….08
2.2.1. Statutory qualifications…………………………………………………………………………………….08-09
2.2.2. General qualifications………………………………………………………………………………………09-10
Chapter 3
3.1. The position of the company secretary……………………………………………………………….11
3.2. How to remove a company secretary………………………………………………………………….11-12
Chapter 4
4.1. Powers and rights of company secretary…………………………………………………………….13
4.2. Restrictions on the powers and rights of company secretary………………………………13
4.3. Functions of company secretary under companies act 2013……………………………….14
4.4. Other functions of company secretary…………………………………………………………………14-15
Chapter 5
5.1. Duties of the company secretary………………………………………………………………………….16
5.1.1. Statutory duties…………………………………………………………………………………………………16-17
5.1.2. General duties…………………………………………………………………………………………………..17-18
Chapter 6
6.1. Role of a company secretary………………………………………………………………………………19-20
6.2. Need of company secretary under companies act 2013……………………………………..20-22
6.3. Role of company secretary in good governance………………………………………………….22-23
Chapter 7
7.1. Liabilities of a company secretary…………………………………………………………………………24
7.2. Responsibilities of a company secretary ………………………………………………………………25-27
Chapter 8
8.1. Conclusion…………………………………………………………………………………………………………….28
8.2. Bibliography………………………………………………………………………………………………………….29

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 Chapter 1

1.1. INTRODUCTION
With the growing complexities of business, supervision of the day to day administration of
company affairs has assumed great importance. Moreover, with increasing complications of the
Companies Act regulating joint stock companies, it has become quite burdensome for top
management to ensure compliance with various provisions of the Act. It is, therefore. Necessary
that an official who is well versed in Company law as well as administration should be appointed
to take care of the legal requirements and day-to-day administration of Company affairs. The
office of the company Secretary is expected to fulfil this need.

In this unit you will study the definition, status, qualifications, appointment, duties, rights and
liabilities of a company secretary. It will also explain in detail about practicing company
secretaries.

2.2. COMPANY SECRETARY

A Company Secretary means "a person who is a member of the Institute of Company Secretaries
of India". [Sec. 2 (i) (c) of the Company Secretaries Act, 1980],

According to Section 2(45) of the Companies Act, 1956, "Secretary means any individual
possessing the prescribed qualifications, appointed to perform the duties which may be
performed by a secretary under this Act and any other ministerial or administrative duties".

A Company Secretary is the senior position in any public or private organization, placed at the
top most level of the organizations hierarchy i.e. at Management level.

The company secretary is responsible for regulating and efficiently managing the financial, legal
and statutory requirements. Along with that he has to comply with the corporate governance
that includes the welfare of all the stakeholders of the company viz shareholders, employees,
customers, suppliers, financiers, government and the society.

2.3.2. COMPANY SECRETARY IN INDIA:

Section 2(45) of the Companies Act, 1956 defines a ‘secretary’ as follows: “’Secretary’ means a
company-secretary within the meaning of clause (c) of sub-section (1) of section 2 of the
Company Secretaries Act, 1980 and includes any other individual possessing the prescribed
qualifications and appointed to perform the duties which may be performed by a secretary under
this Act and any other ministerial or administrative duties.” The Company Secretaries Act, 1980
defines a company secretary as “a person who is the member of the Institute of the Company
Secretaries of India.”

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From the definition of a company secretary, as noted above, the following points emerge:
❖ Only individuals can be appointed as secretary of a company. Thus, a firm or a
body corporate cannot be appointed as a company secretary.
❖ He should possess the prescribed qualifications as may be applicable to different
circumstances of appointment of a company secretary.
❖ The Company Secretary performs the functions performed by a secretary under
the Companies Act including any other ministerial or administrative duties.

Section 383A of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000
provides for the statutory requirement for certain companies to have a Company Secretary. Sub-
section (1) of Section 383A provides that every company having a paid-up share capital of such
sum as may be prescribed shall have a whole time secretary and where the Board of directors of
any such company comprises of only 2 directors, neither of them shall be the secretary of the
company. The Government has, in exercise of its powers under this section and section 2(45),
framed Companies (Appointment and Qualifications of Secretary) Rules, 1988. These rules, inter
alia provide that every company having a paid-up share capital of not less than Rs. 2 crores must
have a whole time secretary who should be a member of the Institute of Company Secretaries of
India. Further, the rules provide that when a company with a lesser paid-up share capital raises
the same to Rs. 2 crores or more (w.e.f. 11/6/2002), the company shall within a period of one
year from the date of such increase appoint a person as a whole-time secretary who should be a
member of the Institute as aforesaid.

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 Chapter 2

2.1. APPOINTMENT OF COMPANY SECRETARY AS PER COMPANIES ACT 2013:

➢ A Person who is member of ICSI can be appointed as CS.

➢ Every Listed company must have appointed as CS
➢ Every unlisted Company /Private limited Company having paid-up capital 5 Crore or more
must also have a full time CS.
➢ A CS is not allowed to hold office more in than one company.
➢ In case of default in complying above provision the company shall be fined from 1 to 5
Lakh Rupees.

Process for appoint CS:

➢ Arrange for Board Meeting only after giving notice to every director to discuss besides
others the following matters. Approve the terms and conditions at which the Company
Secretary (CS) is proposed to be appointed.
➢ Obtain a written consent from the person who is to be appointed as Company Secretary.
➢ Inform the Stock Exchange with which shares of the company are listed on the date of
this meeting before the board meeting
➢ Inform the said Stock Exchange within 15 minutes of the Board Meeting, of the outcome
of the meeting by letter or fax.
➢ File the relevant form (DIR-12) with the concerned ROC within 30 days from the date of
Appointment.
➢ Pay the requisite fee for the same.
➢ Make necessary entries in the Register of Directors/ Secretary.
➢ The whole-time secretary indicates that a Company Secretary must be in the employment
of the company.

2.2. QUALIFICATIONS
The qualifications required by a person to become a company secretary may be divided into two
categories: 1) statutory qualifications as laid down by the Companies Act, and 2) general
qualifications. Let us briefly discuss about them.
2.2.1. Statutory Qualifications
Section 2(45) of the Companies Act has laid down that a company secretary must possess the
qualifications prescribed by the Central Government from time to time.
These may be regarded as statutory qualifications. As per the Rules framed in 1988, under the
Act, the qualifications prescribed are as follows:

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1) For companies having a paid-up share capital of Rs. 25 lakh or more there must be a whole-
time secretary, and no one can be appointed as such unless he is a member of the Institute of
Company Secretaries of India.
2) Companies having a paid-up share capital of less than Rs. 25 lakhs may not appoint a whole-
time secretary, but in case a secretary is appointed; as is usually done, he must possess one or
more of the following qualifications:
1. A member of the institute of Company Secretaries of India;
2. Any person who has passed the Intermediate examination
conducted by the Institute of Company Secretaries of India;
3. Post-graduate degree in Commerce or Corporate Secretary ship
awarded by any University in India;
4. Law graduate from any University.
5. A member of the institute of Chartered Accountants of India.
6. A person holding post-graduate degree or diploma in Management
science. Granted by any University or the Institutes of
Management.
7. A member of the institute of Cost and Works Accountants of India.
3) Non-profit companies registered under Sec. 25 of the Companies Act are exempted from the
above rules regarding the qualification li of secretary.
2.2.2. General Qualifications
Besides the statutory qualifications discussed above, any person interested in secretary’s job
should have certain other qualifications as well. They are as follows:
I. He should be well versed in the modern office methods and
procedures relating to filing, indexing etc.
II. He should have acquaintance with office machines, labour
saving and time saving devices, and their usefulness in a
modern organisation.
III. He should be a competent personnel manager conversant with
the provisions of the Factories Act, the Industrial Disputes Act,
and the Workmen's Compensation Act, the Employees'
Provident Fund Act, the Payment of Wages Act and other
relevant laws.
IV. He should have a thorough knowledge of banking operations
and allied legislations connected with specific requirements of
the organisation.
V. He need not be a Chartered Accountant, but should be well
versed in the principles of accountancy as well as in the
technical aspects of business operations.

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An efficient company secretary is not made in a day or month. He acquires the competence
through diligence and hard work, honesty of purpose and integrity of character.

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 Chapter 3

3.1. THE POSITION OF THE COMPANY SECRETARY

The position of the Company Secretary has undergone a lot of change over the last 100 years. In
1887, it was said that “a secretary is a mere servant; his position is that he is to do what he is
told, and no person can assume that he has any authority to represent anything at all; nor can
anyone assume that statement made by him are necessarily to be accepted as trustworthy
without further inquiry.” Again in 1902 his duties were described as “of a limited and of a
somewhat humble character.” Accordingly it has in the past been held that a company is not
liable for the acts of its secretary in fraudulently making representations to induce persons to
take shares in the company, or in issuing a forged share certificate. The secretary is however, the
proper official to issue share certificates, and so the company is estopped or barred from denying
the truth of genuine share certificates issued by him without the authority of the company. He
may also, with a director, validly execute a deed on behalf of the company whether or not that
company has a common seal.
The changed position of the Company Secretary was taken into account in Panorama
Developments (Guildford) Ltd v. Fidelis Furnishing Fabrics Ltd. Where it was said that a company
secretary is a much more important person now than he was in 1887. He is the chief
administrative officer of the company with extensive duties and responsibilities. This appears not
only in the modern Companies Acts but in the role which he plays in the day-to-day business of
the company. He is no longer a mere clerk. He regularly makes representations on behalf of the
company and enters into contracts on its behalf which come within the day-to-day running of its
business. So much so that he may be regarded as held out as having authority to do such things
on behalf of the company. He is certainly entitled to sign contracts connected with the
administrative side of a company’s affairs, such as employing staff and ordering cars. All such
matters come within the implied or apparent authority of a company secretary.

3.2. HOW TO REMOVE A COMPANY SECRETARY

A secretary can be removed from a private limited company at any time by a simple majority vote
of the directors or by ordinary resolution of the members, subject to any service contract in force.
Likewise, a secretary may resign by giving notice in writing, subject to the terms of their service
contract.

The procedure:

Directors must approve a resolution to remove a secretary – this can be done at a board
meeting or by written resolution.

Record the removal or resignation in the company’s statutory register of secretaries.

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 Notify Companies House on within 14 days of the removal or resignation. This can be
delivered online via Web Filing or 1st Formations’ free Online Company Manager.

If applicable, notify the bank that the secretary is no longer an authorised signatory on
the business bank account.

Appointed a new secretary at any time, if required.

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 Chapter 4

4.1. POWERS AND RIGHTS OF COMPANY SECRETARY

Rights are given to the secretary by the Companies Act, Board of directors and the general body
of shareholders. He also derives some rights out of his service agreement with the company. A
secretary has the following rights:
1. Supervision and control: As a head of the office, a company secretary has the rights to
supervise, direct and control all office activities of subordinate offices.
2. Singing authority: Being a principal officer, a company secretary can sign contracts,
proceedings of the company meeting, files and documents on behalf of the company.
3. Exercising power: He has the right to apply power as authorized by the board of directors.
4. Issuing testimonial: A company secretary can issue testimonials to employees on behalf
of the company.
5. Claiming salary and damages: As per contract, he has the right to claim his salary and
other allowances. He can also take legal action against the company if there is any breach
of contract.
6. Preferential creditor: During winding up of a company, company secretary can claim his
legal dues as like as a preferential creditor.
7. Attending meeting: He has the right to be present in the meetings of the shareholders
and board of directors.

4.2. RESTRICTIONS ON THE POWERS AND RIGHTS OF COMPANY SECRETARY

A Company secretary enjoys certain rights and power but there are some restrictions to his rights
and power, which are given below:
1) Distribution and transfer of shares: A company secretary can’t distribute or transfer any
share if he is not authorized by the board of directors.
2) Company agent: A company secretary cannot attend any meeting as a company agent
without any consent of board of directors. He requires authority from the board of
directors to sign any contract on behalf of the company.
3) Taking loan: A company secretary cannot take loan in the name of the company. If he
does so, company will not be liable for such loan.

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4.3. FUNCTIONS OF COMPANY SECRETARY UNDER COMPANIES ACT 2013
According to Section 205 of the Companies Act, 2013 the Company Secretary shall discharge the
following functions and duties, this is the first time that the duties of the company secretary have
been specified in the company law:

➢ To report to the Board about the compliance with the provisions of this
Act.
➢ To ensure that the company complies with the applicable secretarial
standards.
➢ To provide to the directors of the company the guidance they require in
discharging their duties, responsibilities and powers.
➢ To facilitate the convening of meetings and attend Board, committee and
general meetings and maintain the minutes of these meetings.
➢ To obtain approvals from the Board, general meeting, the government and
such other authorities as required under the provisions of the Act.
➢ To assist the Board in the conduct of the affairs of the company.
➢ To assist and advise the Board in ensuring good corporate governance and
in complying with the corporate governance requirements and best
practices

4.4. OTHER FUNCTIONS OF COMPANY SECRETARY:

The Act also contains some other provisions giving recognition to the profession of company
secretaries. They are briefly listed below:

❖ PROFESSIONAL ASSISTANCE TO COMPANY LIQUIDATOR (Section 291) with the sanction

of the Tribunal, the Company Liquidator may appoint one or more professionals, including
company secretaries, to assist him in the performance of his duties and functions under
the Act.

❖ APPEARANCE BEFORE TRIBUNAL (SECTION 432) A party to any proceedings or appeal

before the Tribunal or the Appellate Tribunal may authorize amongst others, a company
secretary, to present the case before the Tribunal or the Appellate Tribunal, as the case
may be.

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❖ CS AS REGISTERED VALUER: Registered value is one of the new concepts introduced by
the Companies Act, 2013 to provide a proper mechanism for valuation of the various
assets and liabilities related to a Company and to standardize the procedure thereof. A
Company Secretary in Practice is eligible to be value.

❖ CS TO PROVIDE BANKING SERVICES:

▪ Diligence Report and Certification in respect of Consortium / multiple
banking arrangement made by Scheduled Commercial Banks/ Urban Co-
operative Banks.
▪ Loan syndication and Documentation, registration of charges, status and
search report.

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 Chapter 5

5.1. DUTIES OF THE COMPANY SECRETARY

The duties of the company secretary may be discussed under the following broad heads:
5.1.1. Statutory Duties
A secretary is the principal officer of the company. In this capacity he is required to comply with
all legal formalities in respect of the provisions of various Acts which have a bearing on the
activities of the company. Hence, relevant provisions of the Indian Companies Act, the Income
Tax Act, the Indian Stamp Act, the Indian Sales Tax Act. Etc. should be considered in this regard.
❖ Under the companies Act
1) In the case of a public limited company, the secretary has to make the statutory declaration
required before commencement of business by the company.
2) He should supervise the maintenance of books and registers of the company.

3) HC LS Responsible for preparation and authentication of resolutions, returns, and

documents, and their filling with the Registrar of Companies.
4) He should supervise the issue, allotment, transfer, and forfeiture of shares and debentures.

5) He is responsible for the issue of Share Certificates, Debenture Certificates, and any other
certified documents on behalf of the company.
6) He is responsible for safe custody and proper use of Common Seal of the company.

7) In the case of winding Company by the Court, he is to verify the statements to be sub pitted
to the Official Receiver or Liquidator.
❖ Under the Income Tax Act
1) ’ It is the duty of the company secretary to see that the income-tax is deducted at source
from the dividends and interests payable and from salaries of employees.
2) He is to supervise the timely filing of tax returns with the Income Tax Authorities and issuing
of certificates of income tax deducted to every shareholder receiving dividend or debenture
holder receiving interest.
❖ Under the Indian Stamp Act
It is the duty of the secretary to ensure that every legal document, Share Certificate, Transfer
Forms, Share Warrants, Debenture Certificates, Mortgages and Charges, Hundis, Promissory
Notes, etc. are affixed with stamps of requisite amounts.

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 1) Under the Sales Tax Act, he is to ensure timely submission of tax returns to the Sales Tax
Authorities and payment of such taxes.
2) Under the Factories Act, Payment of Wages Act, Industrial Disputes Act, the Estate Duty Act,
Monopolies and Restrictive Trade Practices Act, etc. , he should comply with the relevant
requirements.
5.1.2. General Duties
Besides the Statutory Duties, a company secretary has to perform many other duties covering
dine rent spheres of activities. They are known as general duties such as:
• Duties as an Agent of the Company.
• Duties towards the Directors and other Managerial Personnel.
• Duties towards Shareholders.
• Duties as Public Relations Officer.
• Duties as an Office Executive.

❖ Duties as an Agent of the Company

As. agent of the company, it is the duty of the secretary to interpret and implement the decisions
of the £f9ard of Directors of the company. He should communicate these decisions to the staff,
shareholders and outsiders, and finally execute them accordingly.
He should convene meetings of the Board of Directors, issue notices and agenda of such meetings
and ramrod their proceedings. The secretary can bind the company by his actions provided that
he acts within the scope of his authority. Although he is the agent of the company, he cannot
enter into contracts with third parties unless he is authorized to do so.

❖ Duties towards the Dlzecton and other Managerial Personnel

Beside execution of the orders, the company secretary should help the Board of Directors to
formulate policies. He should collect, arrange, ahd communicate information regarding the
company and its related affairs to advise and guide the Directors. Similarly, on all legal matters,
the secretary should suggest the desired action along with suitable opinions. He should extend
similar help and guidance to other managerial personnel as and when required.

❖ Duties towards Shareholders

17
The shareholders who have subscribed to the share capital of the company are its owners. They
have a right to safeguard their interest in the company. The company secretary, being the chief
officer of the organization expected to protect this interest. He is the link between the company,
its directors and the shareholders.
The secretary should take care of all matters relating to issue of shares, their allotment, call
notices, and forfeiture, if any, registering share transfers, supplying copies of documents under
the rules, payment of dividends, and calling of shareholders’ meetings and recording their
proceeding. He should do his utmost to develop smooth relations between the directors and the
shareholders and avoid all possible conflict between the two.’ In the process, he should not
divulge any secrets of the company which can adversely affect the interest of the company or
any of its shareholders.
❖ Duties as Public Relations Officer
As the chief spokesman of the company, the company secretary projects, develops and nourishes
the image of the company to the outside world. He informs the investors, creditors, customers,
bankers, solicitors, government officials, and other sections of the public about the working and
activities of the company through correspondence, circulars, press statements and other media.
He should be a forceful advertiser as well as the liaison officer of the company without breaking
the rules of secrecy. He should have a broad vision of the company’s progress and future growth
and communicate the same effectively to develop lasting public loyalty.

❖ Duties as an Office Executive

The company secretary is the executive head of the office and discharges his duties with the
assistance of his subordinates. It is the secretary’s duty to organise, supervise and co-ordiante
the office work for which he is directly responsible to the Managing Director and Ake Board. All-
important records and files are kept in the custody of the secretary. He keeps control over the
internal communication system through which he issues orders to various departments and
coordinates their activities at the office level.
The secretary should be able to appreciate the problems faced by different sections of office
staff and try to handle them without prejudice to any of them. He shou!d try to win the
confidence of the staff for successful execution ‹if the policies of the Board of Directors.

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Chapter 6

6.1. ROLE OF A COMPANY SECRETARY

The Company Secretary plays an important role in company administration and plays a three-
fold role as a statutory officer, as a coordinator and as an administrator. He is liable not only to
the company, but also to its shareholders, creditors, employees, consumers, society and the
Government. As one of the principal officers of the company, he is responsible for strict
compliance with the various provisions of the Companies Act. He also holds a high administrative
position in the company and it is his duty to ensure that the policies and decisions of the Board
are effectively implemented. As a general administrative officer, the Company Secretary is
responsible for efficient administration of the company and has to supervise, control and
coordinate the functioning of different departments of the organization. He is in such a position
that he can have an overall view of different aspects of company administration and can develop
a strong and efficient organizational structure.
As the principal officer of the company, the Company Secretary is a vital link between the
Company, the Board of Directors, shareholders and governmental and regulatory agencies. He is
a business manager and an important adjunct in corporate management hierarchy, serving as
the Registrar for the company. He acts as a confidante of the Board of Directors, takes part in the
formulation of long-term and short-term corporate policies, maintains statutory books and
records and ensures compliances with legal and procedural requirements under various
enactments for effective corporate governance. His duty involves advising the Board of Directors
on the ramifications of the proposals under the consideration of the Board. As a corporate
development planner he identifies expansion opportunities, arranges collaborations,
amalgamation, mergers, acquisitions, takeovers, divestment, setting up of subsidiaries and joint
ventures within and outside India. He looks after the entire secretarial functions which include
preparing agenda, convening, conducting and minuting meetings of Board of Directors,
Shareholders, Annual General Meetings, Inter-departmental meetings and meetings with foreign
delegations, Financial Institutions, regulatory authorities, etc.
The role of the Company Secretary is as follows:
i. Advisor to the Board of Directors: To advise and assists the members of the board
with respect to their duties and responsibilities as directors and compliance with
their obligations under the Companies Act, Stock Exchange requirements and
issues on corporate governance. In addition, he is also to act as a channel of
communication and information to executive and non-executive directors.
ii. Controller of Management functions: To ensure that the board’s decisions are
properly implemented and communicated by assisting in the implementation of
corporate strategies and policies.

19
 iii. Corporate Governance and compliance officer: To ensure proper compliance
with all relevant statutory and regulatory requirements.
iv. Corporate Communications: To communicate with the stakeholders of the
company as appropriate so as to ensure that due regards are paid to their
interests.

6.2. NEED OF COMPANY SECRETARY UNDER COMPANIES ACT 2013

The present Companies Act has strengthened the role of company secretaries. 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:

1. Introduction of secretarial audit

Secretarial Audit is the process to check whether the company is adhering to the legal and
procedural requirements and a process to monitor the company’s compliance with the
requirements of the stated laws. The objective behind the introduction of secretarial audit is to
improve corporate governance and compliance.

According to Section 204 of the Companies Act 2013, it is the duty of the Company Secretary in
practice to perform secretarial audit of every listed company and any such other class of
prescribed companies. The Central Government has prescribed the other class of prescribed
companies as-

• Every public company with a paid-up share capital of Rs. 50 Crore or more.
• Every public company with a turnover of Rs. 250 Crore or more.

2. Secretarial standards

The objective behind the formulation of secretarial standards is to integrate, harmonize and
standardization of diverse secretarial practices. The Companies Act, 2013 under Section 118 has
made the compliance of Secretarial Standards compulsory on meeting of the Board of Directors
and on general meetings.

3. Annual return

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Annual return is a comprehensive document contains information regarding share capital,
directors, shareholders, changes in directorships etc about the company. Under the old
Companies Act of 1956 the annual return of the listed companies are required to be signed by
the company secretary in practice. The new Companies Act, 2013 under Section 92 has widened
this requirement by providing that annual returns of companies having such paid up capital and
turnover to be signed and certified by the company secretaries in practice.

4. Appointment of whole-time key managerial personnel

Under Section 203 of the new Companies Act, 2013, the companies has to compulsorily appoint
the whole time Key Managerial Personnel in respect of certain class of companies as prescribed
by the Central Government to ensure good corporate governance and regulation. The company
shall have the following whole-time Key Managerial Personnel (KMP):

• Managing Director, or Chief Executive Officer or manager and in their absence, a

whole-time director.
• Company Secretary.
• Chief Financial Officer.

So this made the appointment of whole-time Company Secretary mandatory for better efficiency.

5. Functions of company secretary

According to Section 205 of the Companies Act, 2013 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:

• To report to the Board about the compliance with the provisions of this Act.
• To ensure that the company complies with the applicable secretarial standards.
• To provide to the directors of the company the guidance they require in discharging
their duties, responsibilities and powers.
• To facilitate the convening of meetings and attend Board, committee and general
meetings and maintain the minutes of these meetings.

21
 • To obtain approvals from the Board, general meeting, the government and such other
authorities as required under the provisions of the Act.
• To assist the Board in the conduct of the affairs of the company.
• To assist and advise the Board in ensuring good corporate governance and in
complying with the corporate governance requirements and best practices.

6.3. ROLE OF COMPANY SECRETARY IN GOOD GOVERNANCE

The Cadbury Report stated that the company secretary “has a key role to play in ensuring
that board procedures are both followed and regularly reviewed.” It pointed out that the
chairman of the Board looked to the company secretary for guidance on what his
responsibilities are under the rules and regulations to which he is subject, and on how
those responsibilities should be discharged.
From our study of the functions of a company secretary in the previous chapter, his role
in ensuring good corporate governance can be elucidated under the following points:
(a) Ensuring the smooth running of the Board’s and Board Committee’s activities by
helping the Chairman to set agendas, preparing and presenting papers to the Board and
Board Committees, advising on Board procedures and ensuring that the Board follows
them;
(b) Acting as a primary point of contact and source of advice and guidance for,
particularly, non-executive Directors as regards the Company and its activities in order to
support the decision making process.

(c) Facilitating the induction of new Directors into the business and their roles and
responsibilities, and assisting in the ongoing training and development of Directors.

(d) Keeping under close review all legislative, regulatory and corporate governance
developments that might affect the Company’s operations, and ensuring the Board is fully
briefed on these and that it has regard to them when taking decisions.

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(e) Ensuring, where applicable, that the standards and/or disclosures required by the
Combined Code annexed to the UK Listing Rules are observed and, where required,
reflected in the Annual Report of the Directors.

(f) Ensuring compliance with all legal and regulatory requirements including the
continuing obligations of the Listing Rules and all statutory filing requirements.

(g) Together with the Human Resources Director, keeping in touch with the debate on
Corporate Social Responsibility and stakeholders, and monitoring all developments in this
area and advising the Board in relation to its policy and practices with regard to Corporate
Social Responsibility and its reporting on that matter.

(h) Managing relations with investors, particularly institutional investors, with regard to
corporate governance issues and the Board’s practices in relation to corporate
governance. And

(i) Making arrangements for and managing the whole process of the Annual General
Meeting and establishing, with the Board’s agreement, the items to be considered at the
AGM, including resolutions dealing with governance matters.

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 Chapter 7

7.1. LIABILITIES OF A COMPANY SECRETARY

• Statutory liabilities.
• Contractual liabilities.

STATUTORY LIABILITIES
• Sections 39: for failure to send copies of Memorandum and Articles, etc., to members
within seven days of the requirement fine up to Rs 50 for each offence.
• Section 75 : for failure of file with the Registrar a return of the allotments of shares within
thirty days after the allotment fine up to Rs. 500 for every day during which the default
continues.
• Section 150 : for failure to maintain register of members with prescribed particulars fine
up to Rs. 50 for every day during which the default continues.
• Section 165 : for default in holding the statutory meeting and filing the statutory report
fine up to Rs. 500.
• Section 168 : for default in holding the annual general meeting of the company fine up to
Rs 500 and in the case of a continuing default, a further fine up to Rs. 250 for every day
after the first during which such default continues.
• Section 303 : for failure to maintain register of directors etc., with prescribed particulars
fine up to Rs 50 for every day during which the default continues.
• Section 307 : for failure to maintain a register of directors shareholdings with prescribed
particulars -fine up to Rs. 5,000 and also a future fine up to Rs 20 for every day during
which the default continues.
CONTRACTUAL LIABILITIES
A company secretary has also certain liabilities arising out of his contract of service with the
company. So long as he acts within the scope of. His authority, in good faith, bona fide and take
reasonable care in the discharge of his duties, he incurs no personal liability. But he will be held
personally liable to make good the loss to the company for willful negligence, or misconduct or
fraud committed with in the course of his employment. He also becomes personally liable if he
acts beyond his authority, for any loss suffered by the company or any third party on account of
his action. However, he is not liable for fraud committed by his assistants unless his connivance
is proved.

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7.2. RESPONSIBILITIES OF A COMPANY SECRETARY
1. Guide:
CS works as an advisor by suggesting the role and power of the chairman and director of the
company.
2. Company Secretary Audit:
A CS makes sure that the company is following the laws and guidelines explained in the
memorandum in order to make the easy functioning of the organization, as per the rules
mentioned in Section 204 of the Companies Act, 2013. It is not only a role, but the duty of the CS
to execute such audits of prescribed and listed companies.
3. Legal Advisor for Business:
The Company Secretary firm knows the laws of the company very well and works as a legal
advisor for the executives. During court of law matters, he advises on the company rights by
taking the deep subject knowledge from the expert.
Besides this, it is also important for a CS to follows these legal aspects:
• Furnishing the annual returns and forms according to the Companies Law.
• Helps the chairman and directors in implementing some guidelines effectively.
• CS check the legal necessities required for the equipment concerned to share certificates.
• Regulates the flow of dividends in a phased manner according to the laws followed by the
company.
4. Link Between Inter and Intra Company Works:
A Company Secretary plays a role of connectors between the investors, board of directors, and
authorities who work in the direction of the company’s functioning and regulation.
#5. Keep Record Of Legal Works:
The professional company secretary of India maintains the information regarding investors,
shares, directors, and members in a record.

6. Scheduling Company Meetings:

He is also responsible for arranging the shareholders and company board meeting. The articles
of the company will work on the final needs for shareholder and board of director meetings, but

25
it is the legal company secretary who is responsible for following the notice necessities, deal with
any sort of furnishing or revising the records.
7. Maintaining Company Records
The company secretary firm oversees the matter of maintaining some records of a company even
if it is not strictly needed by the law. The responsibility comprises:
• Pension and Insurance detail
• VAT registration
• PAYE information
• Tax Record and Accountancy
• Statutory compliance records
8. Command over Corporate Governance
A structure of good corporate governance is important for companies irrespective of the size, but
it becomes difficult with a load of increasing stakeholders and company size.
In India, it is the Company Secretary advises the board of directors on corporate governance and
director’s duties. This comprises managing the interest area of the shareholders, issues of conflict
in interest, investor guidelines and handling with applicable codes.
9. Company Statutory Register
It is the necessity of companies to maintain certain statutory registers which include:
• register of directors;
• register of charges;
• register of allotments;
• register of transfers;
• register of members;
• minutes of meetings and resolutions;
• register of secretaries;
• register of directors’ interests;
• register of debenture holders;
• service contracts of directors;
• directors’ indemnities;

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 • minutes of meetings and resolutions;
• Documents of purchase or redemption the shares out of the capital by a private company;
• Report to members of the result of the investigation put by a company into interests in
its own shares.
As explained after the Companies Act, 2013, the power of company secretary in India have
broadened and more direct responsibilities have into effect. As mentioned in section 203, the
companies do not need to hire full-time managerial personnel relying on the section of the
company as mentioned by the center.
This is required to be done in order to make sure the efficient governance and corporate
regulation are working well. The important fact is to hire the CFO and CEO, it is necessary for the
companies to appoint a Company Secretary professional, this describes the importance of the CS
in the modern world.

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 Chapter 8

8.1. CONCLUSION:

The focus of the company secretary’s responsibilities will differ depending on the type of
company, whether it is public or private, and also depending on the industry no matter what the
organization however the role has expanded beyond simply ensuring statutory compliance to
become a pivotal one where the skills of the company secretary can have a direct impact on the
effectiveness of the Board and organization.

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 8.2. BIBLIOGRAPHY

BOOKS

1. Hirani M.H, the Company Law Related to Social Responsibility of Company Directors. (New Delhi: A.P.
H Publications, New Delhi, 1997).

2. Company Law by Avtar Singh, Eastern Book Co. (EBC) (1 January 2016)
3. Taxmann's Company Law (CBCS) by Anil Kumar Taxmann,Publications Pvt. Ltd. (1 January
2020
4. Company Law by Dr. N.V. Paranjape , Central Law Agency (1 January 2017)

WEBSITES

1. https://bbamantra.com/company-secretary-introduction/
2.https://www.toppr.com/guides/business-laws-cs/role-of-company-secretary/role-of-
company-secretary-under-companies-act/
3. https://freebcomnotes.blogspot.com/2017/03/company-secretary-qualification-rights.html
4. http://www.businesscommunicationarticles.com/powers-and-rights-of-company-secretary/
5.https://www.google.com/search?sxsrf=ALeKk03RHAJcsJUQxOCYAwviE666rdK3aw:160087707
4933&q=duties+of+company+secretary+under+companies+act+2013&sa=X&ved=2ahUKEwjAk
oXr0__rAhUV6XMBHT2DBBwQ1QIoAXoECA0QAg&biw=972&bih=614
6. https://taxguru.in/company-law/company-secretary-companies-act-2013.html

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