The Role of Company Secretary Under Companies Act
Role of Company Secretary is to ensure the effective execution of decisions made by top officials such as the board of directors, chairman, and CEOs. Check here role of Company Secretary under the Companies Act, 2013.
Mridula Sharma8 Mar, 2024
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The role of Company Secretary is to ensure that decisions made by top officials like the board of directors, chairman, and CEOs are carried out effectively. They manage the organization's administration and ensure it meets regulatory requirements.
This includes attending meetings, handling legal paperwork, and providing advice to the board when necessary. Contrary to its name, the role isn't just about secretarial duties; Company Secretaries collaborate with professionals and leaders.Role of Company Secretary Under the Companies Act, 2013
A Company Secretary as delineated in the Companies Act, is an individual who holds membership in the Institute of Company Secretaries of India (ICSI). This membership qualifies them to fulfill a range of administrative duties within an organization. Specifically, Section 2(1)(c) of the Company Secretaries Act, 1980, elucidates this designation and underscores the importance of their role in executing ministerial and administrative functions within the company.Sections in the Companies Act Impacting the Role of Company Secretaries
Section 118:
Under the Companies Act of 2013 , Section 118 mandates companies to adhere to secretarial standards. This requirement aims to streamline and standardize various secretarial practices for better integration.Section 204:
By Section 204 of the Companies Act 2013, Company Secretaries in practice are responsible for conducting secretarial audits for all listed companies. Secretarial audit ensures compliance with relevant laws, aiming to enhance corporate governance and adherence.Company Secretary's Role as a Scrutinizer in E-Voting
Section 203:
Section 203 of the Companies Act 2013 requires certain categories of companies to appoint full-time key managerial personnel, including Managing Directors or CEOs, Company Secretaries , and Chief Financial Officers. This mandate underscores the importance of having a full-time Company Secretary for improved operational efficiency.Section 92:
An annual return is a measure of the investment's performance over time, expressed as an annual percentage. Previously, only listed companies were obliged to have their annual returns certified by a company secretary. However, the new Companies Act extends this requirement to include many other industries, thereby augmenting the role of Company Secretaries within organizations.Roles of Company Secretary Under Companies Act, 2013
The following are the primary roles of Company Secretary as per Companies Act, 2013:- Supporting the Board in managing the company's operations effectively.
- Offering advice to directors on their responsibilities.
- Upholding Corporate Governance standards.
- Ensuring compliance with secretarial standards.
- Obtaining necessary permissions from the board and governmental bodies, adhering to relevant regulations.
- Facilitating the organization of meetings.
Rights of Company Secretary
The significant duties entrusted to a Company Secretary encompass a range of responsibilities vital for the smooth functioning of an organization:- Supervision and Guidance: One of the primary roles entails overseeing and providing direction to subordinate officers and employees, ensuring that tasks are executed efficiently and in alignment with the company's objectives.
- Authentication of Meeting Proceedings: T he Company Secretary holds the responsibility of signing and authenticating the proceedings of meetings, thereby formalizing the decisions and actions taken during these gatherings.
- Whistleblowing Authority: In the interest of upholding ethical standards and transparency, the Company Secretary possesses the right to blow the whistle whenever instances of malpractice or wrongdoing are detected within the organization.
- Attendance at Key Meetings: It is incumbent upon the Company Secretary to attend crucial gatherings such as shareholder meetings and meetings of the Board of Directors, where their insights and expertise play a pivotal role in decision-making processes.
- Contractual Representation: Acting as a legal representative of the company, the Company Secretary holds the authority to sign contracts and agreements on behalf of the organization, ensuring that all legal formalities are duly fulfilled.
- Claiming Dues in Liquidation: During the process of liquidation, the Company Secretary is entitled to claim their dues, akin to a creditor, thereby safeguarding their financial interests in the event of company dissolution.
Restrictions on Company Secretary
Company secretaries have important restrictions to follow:- They can't admit to owing money if the company gets sued.
- They need permission from the Board of Directors to handle share registrations and transfers.
- They're not allowed to make contracts for the company unless the Board authorizes it.
- They can't borrow money using the company's name.
Difference Between Old and New Companies Act
Check the table below for the difference between the Old and New Companies Acts regarding the roles of Company Secretaries.| Difference Between Old and New Companies Act for roles of Company Secretary | ||
|---|---|---|
| Basis of Difference | Companies Act, 1956 | Companies Act, 2013 |
| Compliance Certificate | Company secretaries issued compliance certificates. | Role expanded to include promotion, formation, etc. |
| Appointment | Required for companies with paid-up capital > Rs.5 lakhs. | Mandatory for listed companies with paid-up capital > Rs.10 lakhs. |
| Penalty | Failure to appoint incurred Rs.500 per day penalty. | Non-appointment penalty not less than Rs.1 lakh. |
| Also Check: | |
| Company Secretary Course | CS Exam 2024 |
| CSEET 2024 | CS Executive 2024 |
| CS Professional 2024 | CA Vs CS |
Role of Company Secretary Under Companies Act FAQs
What is the role of a Company Secretary?
A Company Secretary ensures effective implementation of decisions made by top officials like the board of directors and CEOs. They handle administrative tasks, attend meetings, manage legal paperwork, and offer advice to the board when needed.
What are the primary responsibilities of a Company Secretary under the Companies Act, 2013?
The primary responsibilities include supporting the board in managing company operations, advising directors on their responsibilities, upholding corporate governance standards, ensuring compliance with secretarial standards, obtaining necessary permissions, and facilitating meetings.
What are the key rights of a Company Secretary?
Key rights include supervising and guiding subordinate officers, authenticating meeting proceedings, blowing the whistle on malpractices, attending important meetings, acting as a legal representative, and claiming dues in liquidation.
What restrictions do Company Secretaries face?
Restrictions include not admitting to company debts in lawsuits, requiring board permission for share registrations and transfers, not making contracts without authorization, and not borrowing money in the company's name.
What are the differences between the roles of Company Secretaries in the old and new Companies Acts?
Under the Companies Act, 1956, compliance certificates were issued, appointment was required for companies with paid-up capital over Rs.5 lakhs, and failure to appoint incurred a penalty of Rs.500 per day. In contrast, under the Companies Act, 2013, the role expanded to include promotion and formation, appointment became mandatory for listed companies with paid-up capital over Rs.10 lakhs, and the penalty for non-appointment was not less than Rs.1 lakh.
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