Introduction
A company secretary is a very important person in a company, he is an important managerial and administrative part of a company. Now under the Companies Act 2013, he could also be the legal representative of the company. He performs and manages various regulatory functions like carrying incorporation of the firm, sufficing preparation and audits of business reports, filing annual returns, dealing with amended regulations on a steady basis, etc. He also plays a definite role as a Business advisory to the board of directors of the company guiding them to incorporate laws, corporate governance, strategic management, project planning, capital markets, and securities law. In short, a Company Secretary works as an in-house legal expert and compliance officer with the company.
The Company Secretary can not be the same person as the limited company director, however, in the absence of a company secretary, the company director will need to absorb the required duties. The contemporary company secretary is much more than a “note taker” at a board meeting or a mere servant of the board but is ‘the key Managerial officer of the company’. The specialized rate of the modern company secretary has emerged as the ‘key Managerial personnel’ and compliance officer within the organization
According to Section-2(24) of the Companies act 2013 define “Company Secretary” or ‘Secretary’ means a Company Secretary as defined in clause (c) of sub-section (1) of section-2 of the Company Secretary Act, 1980, (56 of 1980) who is appointed by a company to perform the functions of a company secretary under this act.
According to Section-2(1)(c) of the Company Secretary Act, 1980, company secretary are the people who are the member of the Institute of Company Secretary of India. Hence, he is a member of ICSI and performs the various ministerial and administrative functions of the organization.
According to the Companies Act, 2013 major roles of a company secretary are:-
- Firstly, to assist the board in the conduct of the affairs of the company.
- Secondly, to guide the directors about their duties.
- Ensuring and complying with corporate governance.
- Ensuring that the company complies with secretarial standards.
- To take the required permission from the board and various government bodies. Hence, he also has to follow the provisions regarding the permission acquisition.
- Lastly, to facilitate the convening of meetings.
The Roles of a Company Secretary
1. Guide.
Company Secretary works as an advisor by suggesting the role and power of the chairman and director of the company.
2. Companies legal advisor.
The Company Secretary firm knows the laws of the company very well and works as a legal advisor for the executives. Besides this, it is also important for a company secretary to follow these legal aspects:-
- Furnishing the annual returns and forms according to the companies law.
- Helps the chairman and directors in implementing some guidelines effectively.
- The company secretary checks 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.
3. Maintaining legal work record.
The professional company secretary of India maintains the statistic regarding investors, shares, directors, and members in a record.
4. Company secretary audit.
The company secretary makes sure that the company is following the laws and guidelines explained in the memorandum 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 company secretary to execute such audits of prescribed and listed companies.
5. The link between inter and intra company work.
A company secretary plays the role of connector between the investors, board of directors, and authorities who work in the direction of the company’s functioning and regulation.
6. Board and committee processes.
The company secretary plays a leading role in good governance by helping the board and its committees function effectively and following their terms of reference and best practice. Providing support goes beyond scheduling meetings to proactively manage the agenda and ensuring the presentation of high quality up to date information in advance of meetings. This should enable directors to contribute fully inboard discussion and debate and to enhance the capability of the board for good decision making.
7. Scheduling company meetings.
He is also responsible for arranging the shareholders and company board meetings. The articles of the company will work on the final needs for shareholders and board of directors meetings, but it is the legal company secretary who is responsible for following the notice necessities ideal with any sort of furnishing or revising the records.
8. Maintaining company record
The company secretary firm aver sees the matter of maintaining some records of a company even if it is not strictly needed by the laws. The responsibility comprises:-
- Pension and Insurance details.
- VAT registration.
- PAYE information.
- Tax record and Accountancy.
- Statutory compliance records.
9. Command over corporate governance.
A structure of good corporate governance is important for companies irrespective of the size, but it becomes difficult with a legal load of increasing stakeholders and company size. In India, it is the company secretary who advises the board of directors on corporate governance and director duties. This comprises managing the interest area of the shareholder, issues of conflict in interest, investor guidelines, and handling with applicable codes.
10. Board development.
All directors should have access to the advice and services of the company secretary. In promoting board development the company secretary should assist the chairman with all development processes including board evaluation, induction, and training. This should involve implementing a rigorous annual board committee and individual director assessment and ensuring action arising from the reviews are completed. Further, the company secretary should take the lead in developing tailored induction plans for new directors and devising a training plan for the individual director and the board.
11. Company statutory register.
Corporation ought to maintain certain statutory registers that include:-
- Register of administrators.
- Register of charges.
- Register of allotments.
- Register of transfers.
- Register of members.
- Register of secretaries.
As explained when the companies act 2013, the power of the company secretary in India has broadened and a lot of direct responsibilities have result. As mentioned in section-203, the companies don’t need to hire full-time managerial personnel relying on the section of the company as mentioned by the center. This is often needed to be done to make sure the efficient governance and corporate regulation are working well. The important fact is to hire the CFO and CEO, the companies must appoint a company secretary.
Company secretaries are typically asked to abet within the management of share transfers unless as tends to be the case with larger and listed public corporations, professional registrars are held on to. Wherever the secretary needs to perform these functions, this usually implies the receiving and processing of stock transfer forms and therefore the cancellation of previous and furnishing of new share certificates.
13. Custody and use of the corporate seal.
An organization is not any longer need to have an organization seal however if it will, the secretary is usually accountable for its confinement and application and particularly, should secure that any provisions within the articles of association relating to its application are determined.
14. Fiduciary duty.
As a matter of general law a secretary, as an officer of the company owes responsibilities to act in bona fides in the best intrigue of the company. These prime responsibilities not to act wherever there’s a dispute of interest or to make secret profits. Breach of these responsibilities the consequences are the secretary for compensation.
15. Signing paperwork.
The duty of signing legal documents on behalf of the company director may sometimes fall to the company secretary. This can be anything from signing cheques and bank documents to the other vital documents.
16. Compliance.
The role of company secretary ought to take time to confirm the corporate remains compliant with legislation outlined in companies act 2006 at all times. They also need to keep up to date with any changes in compliance, such as the iPSC register that came into result in 2017.
As antecedently mentioned the role of company secretary acts as the bridge between shareholders and the company. This suggests that they’ll be communicating any vital announcements. The secretary will be sending out news and liaising with the shareholder to arrange the shareholder’s meeting and the company’s Annual General Meeting (AGM).
18. Professional assistance to company liquidator.
According to section-291 of the Companies Act 2013, with the sanction of the tribunal, the corporate liquidator might appoint one or a lot of professionals, together with company secretaries to help him within the performance of his duties and functions under the act.
19. Appearance before the judicature (tribunal).
According to section-432 of the Companies Act 2013, “A party to any proceedings or appeal before the tribunal or the appellate tribunal might authorize amongst others an organization secretary to present the case before the tribunal or the appellate tribunal, as the case is also”.
20. Company secretary as a registered valuator.
The registered valuator is that the new idea inaugurates by the Companies Act, 2013, to come back up with a correct mechanism for valuation of the numerous assets and liabilities associated with an organization and to systemize the course of action thence, an organization secretary in the application is entitled to be valuator.
21. Company secretaries to provide banking services.
Diligence report and certification in respect of consortium/multiple banking arrangements made by scheduled commercial banks/urban co-operative banks. Loan syndication and documentation, registration of charges, status, and search report.
22. Disclosure and reportage.
In recent years there has been raised stress on the standard of corporate governance reportage and entails raised transparency. The corporate secretary sometimes has responsibilities for drafting the governance section of the company’s annual report and guaranteeing that each one reports are made accessible to shareholders in step with the relevant regulative or listing demand.
23. Reporting of fraud.
Within the course of the performance of his duties as secretarial auditor, if the corporate secretary in observes has reason to believe that associate offense involving fraud is being or has been committed against the corporate by officers or employees of the organization he should immediately report the bear on the central government.
This Article is Authored by Deepanshu Ashava, 4th Year B.A.LL.B Student at IMS Law College, Noida.
