According to section 2(1) (c) of the Companies Act 2013, Company secretaries are the people who are members of the Institute of Company Secretaries of India. A Company secretary is considered one of the topmost officials in the company's managerial hierarchy.
The company secretaries' tasks are primarily administrative and executive. Being Key managerial personnel, a company secretary must comply with all the vital laws of the company, which are also known as company compliances. And they are also deemed responsible for implementing and executing the rules and regulations already decided by the higher authority of the company. A company secretary is involved in various policy decisions and certain compliances. Let’s get ahead and learn more about Company secretaries.
This article will help you learn about Company secretaries, the qualifications required to become a company secretary, the responsibilities or requirements of a company secretary and the role of a company secretary in the day-to-day affairs of the business.
Did you know? Presently, there are at least 65,000 members of the Institute of Company Secretaries of India, a professional body which promotes, regulates and develops the Company Secretary Profession in India.
Eligibility Requirements a Company Secretary Has to be Equipped with
According to section 2 (24) of the Companies Act, 2013; a Company Secretary requires to be equipped with specific requirements that the Union Government has laid out from time to time. The particular qualifications specified under the companies (Secretary’s qualifications) Rules 1975 for the appointment of a Company Secretary are:
- A Company with a paid-up share capital of not less than ₹50 lakhs is required to appoint a Company Secretary member of the institute of company secretaries of India in a key managerial role of the company.
The Company, while appointing a Company Secretary, requires them to possess one or more of the given qualifications:
- The Person should be a member of the Institute of Company Secretaries of India and should have passed the necessary examinations of the institute like CSEET, CS Executive and CS professional according to the passing criteria prescribed by the institute.
- The Person has a suitable law degree from an esteemed and reputed university in the country.
- The Person has a membership in the Institute of Cost and Management Accountants of India as well, after clearing all the relevant examinations of the institute like CMA Foundation, CMA Intermediate and CMA Final according to the passing criteria prescribed by the institute.
- The Person has attained a Postgraduate Degree in Commerce granted by a Reputed college or the University of the Country.
- The Person has a relevant Diploma in Company law from any particular Indian law institute.
The Responsibilities and Duties of the Company Secretary
As a critical managerial officer, a secretary plays a vital role and has to cater to some essential duties. The Responsibilities of a Company Secretary are:
- The Company Secretary is required to be honest and sincere in his work and perform all the designated tasks of the company in good faith.
- The Company Secretary should ensure the statutory returns are correctly and timely filed.
- A Company secretary must maintain and keep all the relevant statutory books and records of the company.
- A Company Secretary must prepare the minutes of the Board meeting or the annual general meeting with the shareholders, mentioning the topics discussed in the meeting, any motion raised by the director or the shareholders, and the result of any polls on a particular motion.
- A Company Secretary is required to be present on the board and at the shareholder meetings, and the signature of a company secretary is of vital importance on any legal document of the company.
- A Company secretary provides general advice on corporate governance matters of the company.
Requirements of Company Secretary and Necessary Skills Involved
A set of unique skills is required in a person to become and perform his duties as a Company Secretary wholeheartedly. The required abilities to become a Company Secretary are:
- To be a Company Secretary, one has to be hardworking and dedicated to their work.
- A Company Secretary's job and work profile require an in-depth knowledge of the legal aspects of taxation accounting, auditing and financial analysis.
- The person should be honest, sincere and committed to his work.
- The job of a Company secretary requires sharp agility of the mind and adaptability to follow different complex time schedules in various situations.
- To discharge all the duties towards the company, a Company Secretary must be equipped with specific knowledge and training, which can be achieved by undergoing the course by ICSI, the institute which manages the profession.
Role of a Company Secretary in a Firm
There is various set of roles assigned for a Company secretary to perform in a Company, which are as follows:
Under statutory compliances, a Company secretary is expected to comply with every kind of company law and provide inputs to the topmost officials of the company about the need to comply with various company laws.
A Company Secretary is required to maintain specific statutory registers of the company and ensure that the necessary filings are done with the Registrar of Companies, like the annual returns, financial statements and forms related to the share capital change of the company. This is one of the functions of the Company Secretary and one of the reasons why you need to hire a Company secretary.
Role of Corporate Governance
The authority of the position of a Company secretary enables them to develop and implement various processes to sustain good corporate governance. The boardroom dynamics are changing, and the chairman and the directors have realised that they need someone with specialised skills and technical knowledge in this field, which is why they look for Company secretaries to provide expertise in this field.
Role of Organisational Governance
A Company secretary is enabled to have a holistic view of the entire framework of the government. As a result, they are usually tasked with the responsibility and the duty to ensure that all kinds of supporting policies and procedures are nicely documented and communicated within a specific timeframe to the topmost officials of the organisation. This is one of the functions of a Company secretary that will help you understand the importance and need of having a Company Secretary in your Company.
Support the Chairman
A Company Secretary must advise the board and the Chairman on all kinds of governance matters as key managerial personnel of the company. The Board and the Company Secretary review all governance processes and whether they fit the purpose or not or if there is scope for any improvement in the governance process.
Board and Committee Development
A Company secretary should try to build a healthy working relationship with the directors and the board members without offering impartial advice and acting in the company's best interests. The Company secretary should try to assist the company's Chairman in all kinds of developmental processes like board evaluation, induction and training of the employees.
The secretary has to perform functions before the director’s meeting, like scheduling the meetings and managing the plan, and ensuring that high-quality presentation of information is prepared in advance of any scheduled meeting. They help in enabling directors to give their total contribution in board meetings and debates to enhance the board’s capabilities to take good decisions for the company's benefit.
This was all about Company secretaries, the eligibility requirements to appoint a Company secretary for a Company and the qualifications required to become a Company Secretary, the Responsibilities and Requirements of Company secretaries and the Role of Company Secretaries in an Organisation. With the help of the information shared in this blog, readers can ascertain the need and importance of having a Company secretary in an Organisation.
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium enterprises (MSMEs), business tips, income tax, GST, salary, and accounting.