Who is a Company Secretary?
As defined by the Companies Act, a company secretary is a professional who:
- Is a recognized member of the Institute of Company Secretaries of India (ICSI).
- Performs the functions and adheres to the rules and regulations outlined by the ICSI and the Companies Act.
The Companies Act accords special recognition to company secretaries serving as Key Management Personnel (KMP) in:
- Private companies with a paid-up capital of Rs 5 crore or more.
- Public companies with a paid-up capital between Rs 5 crore and Rs 10 crore.
What is the Role of a Company Secretary?
Company secretaries are essential to the smooth functioning of a company, and they are expected to carry out their responsibilities with utmost care and attention. Beyond their role as legal advisors, CS professionals must ensure that all business activities comply with legal and regulatory standards. A failure to fulfill these duties could result in personal liability for misconduct and may lead to dismissal for dishonesty or violation of the company’s legal rights. Here are some of their key responsibilities:
- The Company Secretary must ensure corporate compliance with statutory and regulatory requirements while maintaining accurate and proper records.
- They guide the board of directors on governance matters and ensure that the board's decisions are implemented.
- Act as a liaison between the board and shareholders and communicating with regulatory authorities.
- Manage the company's statutory books, including registers of members, directors, and secretaries.
- Organize and prepare agendas for board meetings and annual general meetings (AGMs) and ensure that minutes are accurately recorded.
- Provide guidance on corporate governance and ethical practices.
Duties of a Company Secretary as per Companies Act
Company secretaries hold a crucial position in ensuring effective corporate governance. They handle various key responsibilities, including overseeing company incorporation, managing share capital, securing essential certifications, and organizing general meetings. Their duties extend to financial reporting, especially for non-banking financial companies, and ensuring compliance by filing resolutions with the Registrar of Companies. They also maintain precise records of board and general meeting activities, playing a vital role in upholding the operational efficiency and legal framework of organizations.
Duties of a Company Secretary as per Income Tax Act
To verify and submit attested returns and forms, the Company Secretary must monitor the authentication process and ensure accurate deduction of TDS (Tax Deducted at Source) from employee salaries. They are also responsible for maintaining proper TDS records and ensuring timely submission of TDS to the government.
Obligations of a Company Secretary from Other Acts
The Company Secretary must obtain necessary government approvals and ensure compliance with regulatory processes, including those related to industrial disputes, the FEMA Act, the State Insurance Act, and the Depositories Act of 1996. They are also responsible for monitoring and adhering to various legal frameworks such as labor laws, competition laws, environmental laws, and the Foreign Exchange Management Act, among others.
Other General Duties of a Company Secretary
- Advisory Role: Act as an advisor to the Board of Directors on risk management, business policies, and strategies.
- Corporate Social Responsibility: Ensure compliance with corporate social responsibilities.
- Intellectual Property Rights: Manage the company's intellectual property rights.
Key Responsibilities of a Company Secretary in Practice
- Business Promoter: Handle promotion and incorporation of companies, audit and certification services, and corporate restructuring.
- Auditor: Provide secretarial audit reports to ensure compliance with laws and regulations.
- Consultant: Act as a consultant for share issuance, legal documents, mergers, and joint ventures.
