A Company Secretary is an important managerial role in any organization. They are responsible for ensuring that the company operates smoothly and complies with all legal requirements. In order to qualify for the position, it is necessary to have the appropriate qualifications or be a member of the Institute of Company Secretaries of India (ICSI).
According to the amended Companies Act, companies with a paid-up capital of at least ₹5 crores are required to appoint a Company Secretary. With their comprehensive skills in finance, corporate law, governance, and corporate secretarial practice, Company Secretaries provide guidance and advice to the Chair, CEO, and non-executive directors in crucial areas of the board’s operations.
The profession of a secretary offers several advantages, including opportunities for quick career advancement and the ability to work closely with the board of directors. Additionally, secretaries can access a diverse range of career options across various industries, with a wide variety of duties and the potential to earn high salaries. This career path also offers the possibility of working internationally.
The role of a secretary is not limited to one industry, as they are required in private businesses, government organizations, and not-for-profit organizations such as charities and professional bodies. Some work independently, as part of small partnerships, or as employees of professional services firms, providing corporate secretarial services to various clients for a fee. The position of a secretary holds a significant importance in an organization as their expertise in corporate laws can help elevate a corporation to a higher level. They possess knowledge in company law and interpretation, enabling them to understand and comply with all the laws and regulations governing labor, tax, banking, and other aspects.
Qualifications Required to be a Company Secretary
To be a Company Secretary, there are specific qualifications that must be met as per Section 2(24) of the Companies Act, 2013, and the Companies (Secretary’s Qualifications) Rules of 1975.
The CS should be a member of the ICSI. Additionally, the Secretary must meet one or more of the specified conditions, such as having a law degree from any reputable university, being a member of the ICMAI – Indian Institute of Cost and Works Accountants, holding a Commerce postgraduate degree from any reputed university, and having a Company Law Diploma from any India Law Institute. By fulfilling these qualifications, a person can become a qualified Company Secretary in India.
Role of a Company Secretary
The role of a company secretary is critical and requires careful attention to responsibilities. They act as a legal mentor, ensuring that all business practices comply with legal requirements to avoid misconduct that could result in termination. The company secretary serves as an essential communication channel between the organization, its owners, board of directors, regulatory agencies, and other interested parties.
According to the Companies Act, the following are the company secretary roles and responsibilities as stated under Section 205:
- Authenticate paperwork and processes used in registration and initiate incorporation procedures.
- Ensure the registrar receives allotment and registration information.
- Apply for an increase in share capital and monitor the delivery of share certificates of allocation.
- Keep track of share warrant holders.
- File annual returns and comply with the law.
- Release the statutory declaration to receive the commencement certificate.
- Manage the statutory books.
- Give all members meeting updates and notices of general meetings at non-banking financial companies.
- Authenticate and sign financial statements and reports such as balance sheets and profit and loss statements.
- File resolutions with the registrar within 30 days.
- Prepare minutes of all board and general meetings.
- Inform the Board of Act compliance, perform additional Act-mandated obligations.
- Ensure compliance with all applicable secretarial requirements.
- Perform any additional responsibilities or duties specified by the Companies Act.
- Confirm and submit attested returns and forms as per Income Tax Return.
- Supervise the authentication and filing process of TDS (Tax Deducted at Source).
- Ensure that the correct amount of TDS is deducted from employees’ salaries, keep TDS reports up to date, and submit TDS to the government as per the Income Tax Return.
- Obtain government approvals, adhere to regulatory requirements for industrial disputes, adhere to the State Insurance Act, the Depositories Act 1996, the Foreign Exchange Management Act, and monitor and adhere many legal regulations such as labor and competition laws, environmental regulations, etc. in accordance with other acts.
Responsibilities of a Company Secretary
The role of a company secretary is vital to ensure compliance with legal requirements. They have specific rights granted by the Companies Act, including promoting and incorporating companies, handling certification and audit services, signing annual returns, overseeing corporate restructuring and takeovers, scrutinizing voting and reporting procedures, administering the revival of sick companies, joining the Company Law Tribunal as a technical member, and investigating taxation and other criminal cases.
In addition to these responsibilities, the company secretary is also authorized to conduct a Secretarial Service audit checklist and attach a Secretarial Audit Report to the officials in the form of MR-3. This ensures that the company follows the procedures outlined in general laws and legal acts and reports any offensive matters of fraud discovered to the government, ensuring corporate compliance and discipline with the laws.
Despite their high status comparable to a director of a corporation, the company secretary is a workforce member and typically the only worker in the company with advisory authority. Their recommendations are carried out and used to carry out important tasks and frame company policy, making them the only external personnel permitted to attend board meetings.