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Wednesday, April 20, 2016

Company Secretary - Qualification, Rights and Duties

Definition and qualification of a Company Secretary:
Company Secretary Appointment and his Rights and Obligations needs to understand the definitions and as per sec. 2(24) of Companies Act 2013, Company Secretary means a Company Secretary define in sec. 2(1)(c) of the Company Secretaries Act 1980. As per this clause, Company Secretary means a person who is a member of Institute of Company Secretary of India. Company Secretary is managerial personnel in a private sector company and in a public sector company, a Company Secretary is a person who can represent his company before any quasi-judicial body in relation to any legal dispute and other legal litigation.
To be qualified as a company secretary, one must clear the:
1.     Company Secretary Executive level programme and Professional level programme.
2. Must have training certificates which includes student induction programme, executive development programme, professional development programmed and long term internship with specified cs entity.
However to apply for the above programmes, one must:
(a)    Be a graduate from any recognized university or institution.
(b)   Should not be less than 17 years of age.
Thus, a company secretary should be a member of the institute of companies secretaries of India.
Legal Position of a company secretary
The legal position of a company secretary may be explained as follows:
a)      Servant of the company: The Secretary of a company is servant of the company, whose duty is to act in accordance within the instructions given to him by directors.
b)      Agent of the company: The secretary of a company, being chief administrative officer of the company by virtue of his office, is also an agent of the company in a restricted sense. He also ostensible authority to enter into contracts on behalf of the company as regards matters connected with office administration.
c)       Officer of the company: As an officer of the company, the secretary may incur personal liability to statutory penalties by reason of non-compliance with the requirements of Companies Act, 2013. Besides, he is a chief officer under whose supervision all ministerial and administrative work at registered office of the company is carried on.

Rights of the Company Secretary:
Company Secretary is a senior level officer. He enjoys the rights as per the agreement signed by him with the Company. Some rights areas follows:
a)      As a senior level officer Company Secretary can supervise, control and he can direct subordinate officers and employee.
b)      A Company Secretary can sign any contractor agreement on behalf of the company as a principle officer of a company, subject to the delegation of power by the board of the company.
c)       Company Secretary can issue guidelines for the employees on behalf of the company.
d)      Company Secretary can attend meeting of shareholders and the meeting of board of directors.
e)      During Winding up he can claim his legal dues as a preferential creditor of a company.
f)       He can sign and authenticate the proceeding of meetings (Board, Annual general or extra ordinary general meeting) and other documents on behalf of the company where common seal is not required.
g)      Company Secretary is a Compliance Officer and he has a right to blow whistle whenever he finds the conduct of the officers or of the directors of the company are detrimental to the interest of the company.

Duties of the Company Secretary
The duties of a company secretary are classified under the following heads:
1.       Statutory duties:
1)      Duties towards the company: The Companies Act, 2013 imposes a number of duties on the secretary such as:
a)      To make a statutory declaration for obtaining certificate of commencement of business;
b)      To sign annual report; and
c)       To sign every balance sheet and every profit and loss account in case of non-banking companies.
2)      Duties to directors: The duties of a company secretary in relation to directors are:
a)      To work according to instructions of directors;
b)      To maintain all important correspondence, files and records for reference of directors; and
c)       To draft directors report.
3)      Duties to whole-time managerial authority: If a company is managed by managing directors or a manager, the main duties of a company secretary in relation to such managerial personnel are:
a)      To organize and control head office of the company efficiently;
b)      To submit all statutory returns in time; and
c)       To draft contracts with vendors, if any, and also with underwriters and share brokers;
2.       General Duties:
1)      Duties towards office and staff: It is a company secretary’s duty to see that various departments are properly organized, supervised, co-ordinated and adequately staffed. He must act as a friend, philosopher and guide to staff.
2)      Other duties: The miscellaneous duties of a company secretary are:
a)      To represent the company on social functions;
b)      To act very cautiously and in the best interest of the company, in case of any emergency;
c)       To act with authority and maintain secrecy of confidential matters; and
d)      To perform his duties honestly and diligently.