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Varunendra Pandey Comapany Secretary Its Role Duties, Functions Ri

The document discusses the role, powers, functions, duties, and liabilities of a Company Secretary according to Indian law. It notes that a Company Secretary is an important role that serves as the principal officer of a company and handles both statutory obligations like filing annual returns as well as non-statutory functions like facilitating board and shareholder meetings. A Company Secretary has responsibilities to the directors, shareholders, staff, and external stakeholders. They also have statutory duties under various acts and contractual liabilities if they fail to properly perform their obligations or act beyond their authority.

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88 views6 pages

Varunendra Pandey Comapany Secretary Its Role Duties, Functions Ri

The document discusses the role, powers, functions, duties, and liabilities of a Company Secretary according to Indian law. It notes that a Company Secretary is an important role that serves as the principal officer of a company and handles both statutory obligations like filing annual returns as well as non-statutory functions like facilitating board and shareholder meetings. A Company Secretary has responsibilities to the directors, shareholders, staff, and external stakeholders. They also have statutory duties under various acts and contractual liabilities if they fail to properly perform their obligations or act beyond their authority.

Uploaded by

varunendra pandey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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COMPANY SECRETARY: POWERS, FUNCTIONS, DUTIES, AND

LIABILITIES

The companies act 1956, does not exactly provide for the definition of a Company
secretary and has rather tried to define the position abstractly by imposing certain
statutory obligations on the post. The company Secretaries Act, 1980 by the virtue of
section 2(i)(c), that, “company secretary is a member of Institute of Company
Secretary of India”. The companies act, 1956 Defines company secretary under
section 2(45) as, Secretary means any individual possessing the prescribed
qualifications, appointed to perform the duties which may be performed by a Sec-
retary under this Act and any other ministerial or administrative duties”.

o Legal character of a Company Secretary

The Nature of the work often suffices for its existing character. The functions
performed by the CS of a company is of the mere servant of the company duly
following the chain of commands and circumscribed under the authority of the board
of directors thereby discreetly carrying out the orders handed to him by them. It used
to be the same way until the judgment of Lord Esher in 1818. Now the position of
Company secretary in the entity has revamped and broadened its jurisdiction. It has
also attained an uncanny resemblance with the legal profession. The CS of a company
has become significant as it comprises a significant place in the administrative
structure of the company besides, holds extensive duties and responsibilities to
deliver.

The position of the company secretary has altered its conventional portfolio. A
company secretary is not mere a clerk but representative of the company, who enters
contracts on behalf of the company and also files various returns in a methodical attire
that now it is a settled principle that a CS has an authority to perform these functions.
The Companies Act also regards him/her be the principal officer of the company. The
traditional position of a CS may be that of a servant but the corporeality speaks much
more than it.

Functions

The Functions of a company secretary are compartmentalized under two heads that
are:
o Statutory
o Non-statutory

Statutory Functions
The statutory functions of a company secretary are;
o Signing of Annual Returns
o Registration of Allotment Returns
o Issuing Share Certificates
o Convening Annual General Meeting
o Maintaining Share Registers
o Maintaining Register of Directors
o Under the Indian stamp Duty Act it is required from a Company Secretary to
ensure that proper stamps are affixed to the Company’s document.
o Sales Tax Act requires that the registration of companies shall be arranged by the
CS.
o Under the Income Tax law, the Company Secretary has to deduct income tax from
the salaries of the staff and dividend payable at source and to submit income tax
returns to the authorities in accordance with the law.

Non-statutory Functions

 Functions in relation to directors are;


o Regulation functions of board of directors according to the law.
o A helping hand in the formulation of policies.
o Issuing notices and preparing the agenda, in consultation with the board of
members and the chairman.
o The company secretary prepares the minutes of the meetings.
o He arranges for payment for the director.

 Functions in relation to shareholders are;


A secretary is the handler of the shareholder’s investment in the company and also
forms the effective mode of communication between the Directors of the company
and the stake holders who are holding their investment in form of shares and
debentures. A company is prima facie build to achieve profit and every investment
into it is to generate returns that are further given to the shareholders as dividends. It is
the duty of the Secretary to facilitate payment of dividends to every shareholder
within 42 days of the Annual General Meeting.

 Functions in relation to the staff


The secretary is the executive head of the company and is responsible for the smooth
functioning of the administration. It is his/her responsibility to supervise the
departments in the establishments to coordinate and mutually discharge the duties of
the office.

 Functions in relation to meetings


There are number of meetings namely, Statutory meetings, annual general meetings,
board meetings, extraordinary general meetings, etc. It is the duty of the secretary to
facilitate the smooth dispensation of these meetings.

 Functions as Executive officer


As executive officer the functions of Secretary are;
o Supervising, controlling, and coordinating activities of the office.
o Handling recruitment, remuneration, induction, promotion, and transfer of the
office staff.
o Issuing orders, circulars, and notices to the heads of the departments.
o Negotiating to the third party on behalf of the company

 Functions as Liaison officer


The secretary has to act as a liaison between the directors, staff, and the government.
It is the secretary through which directors channelizes their communication which is
eventually communicated to Staff members. Secretary conveys the staff grievances to
the management hence, cordial relations are maintained.

Powers of a company Secretary

The powers of the secretary are limited to few those are conferred upon him and the
powers that are delegated to him by the directors of the company. Most of them have
been already defined in the functions that a secretary performs. The secretary has the
power to enter into contracts on day-to-day deliberations. Any such commitment that
has been done by the secretary in the interest of the company shall bind the Company
and the directors as well.

Duties of a Company Secretary

Fundamentally the duties of the Secretary are categorized into two subheads, that is;
o Statutory Duties
o General Duties

Statutory duties
o To sign documents and proceedings requiring authentication by the company.
o To deliver registration and return of allotment to the registrar.
o To give registrar notice for an increase in capital share.
o To share annual return.
o To file the resolution with registrar.
o To make statutory books.
o To send notice of general meetings to every member of the company.
General Duties
o To comply with internal regulation and legislations
o Duty to disclose all information in registers of directors and Secretary for
facilitating inclusion.
o Duty to exercise due diligence
o Duty to draft director’s report
o Ensuring that the decisions of the board are properly communicated to
stakeholders.
o To provide legal advice to the director.
o Certifying documents such as document such as certificates of incorporation,
memorandum, and articles of association.

Liabilities of Company Secretary

The company secretary being the principal officer of the company is invested with
enormous liabilities, the liabilities are further classified into two categories;
o Statutory
o Contractual

Statutory Liabilities
o Default in complying with name requirements, Fine of Rs 1000 every day during
which such default continues.
o Default in filing return on the allotment, fine of Rs 1000 every day during which
such default continues of Rs 100,000 whichever is less.
o Default in delivering share certificates or debentures certificates on time, fine up to
Rs 5 lakh.
o Default in filing an annual return, fine of Rs. 50, 000 to Rs. 5 lakhs.
o Failure to provide notice about board meetings, fine of Rs 1000.
o Failure to maintain the registers of members, fine ranging from 50,000 to Rs. 3
lakhs shall be inflicted.
Contractual Liabilities
o He/she is liable for negligence on his part and shall hold the liability of the same, as a
result of which he shall be dismissed.
o The secretary shall be liable personally for any actions done by him beyond his
authority.

o He is under obligation and under strict confidentiality to not share any information
with the outsiders.
o The secretary is liable for any secret profits made by him under his position.
o Any fraud committed by the secretary shall be borne by him and shall be required to
indemnify the company for the losses caused.

Conclusion

Today, the optics of services of company secretary have changed significantly.


Secretary is now one of the most influential persons of the company. He/she helps the
policy choices made by the directors. Besides CS is like a light-bringer in the grey
areas of law where the director might not have much to tread alone. It is now crystal
clear from the above discussion that CS is principal officer of the company dealing at
the frontline. His actions affect the company and its commitment, thereby making CS
a responsible actor.

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