Appointments, Roles, Responsibilities of Company Secretaries and their Removal

A Company Secretary (CS) is the key managerial personnel of a company. A CS is entrusted with the compliance and legal aspects of a company. The Institute of Company Secretaries of India (ICSI) is the body that regulates and maintains the profession of Company Secretaries. A CS means a person who is a member of the ICSI.

The primary role of the CS is maintaining the company’s books of accounts, auditing the company’s tax returns, advising the board of directors relating to the legal and financial risks of the company and ensuring that the company complies with statutory regulations. 

Appointment Process of a Company Secretary

Section 203 of the Companies Act, 2013 (‘Act’) and Rules 8 and 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (‘Rules’), states that the following companies must appoint a CS as a Key Managerial Personnel (KMP):  

• All listed companies with a paid-up share capital of more than Rs.10 crore.
• All public companies with a paid-up share capital of more than Rs.10 crore.
• All private limited companies with a paid-up share capital of more than Rs.10 crore.
• All unlisted companies with a paid-up share capital of more than Rs.10 crore.

The process of appointment of a CS is as follows:

• Convene board meeting by giving a notice to all the directors and pass a resolution for appointing a whole-time company secretary.
• Inform the Registrar of Companies about the appointment of the company secretary by filing form MGT-14 and DIR-12 within 30 days from the date of appointment. 
• Make necessary entries and maintain a proper register of directors and key managerial personnel after the appointment of the company secretary.
• Inform the stock exchange where the company shares are listed, in the case of a listed company.

A company secretary cannot hold office in more than one company, but he/she can hold office in the subsidiary company simultaneously. 

Roles and Responsibilities of a Company Secretary

The CS appointed by a company must perform the following functions as provided in Section 205 of the Act:

• Report to the board of directors about the compliance statement of the company.
• Ensure that the company is complying with all secretarial standards.
• Do all such other duties as prescribed by the company board of directors from time to time. 

Duties of a Company Secretary

Rule 10 of the Rules provides the duties of the CS, which are as follows:

• Provide the company directors guidance as they may require concerning their powers, duties and responsibilities. 
• Facilitate the convening of meetings, attend general, board and committee meetings, and maintain the minutes of these meetings. 
• Obtain approvals from the general and board meetings, government, and other required authorities as provided under the provisions of the Act.
• Represent before several regulators and other authorities under the Act connected with the discharge of duties under the Act. 
• Assist the company board in the conduct of the company affairs. 
• Advice and assist the board in complying with the corporate governance requirements, ensuring good corporate governance and best practices. 
• Discharge such other duties as specified under the Act or rules. 

Removal Process of a Company Secretary

The process of removal of a CS is as follows:

• The board of directors can remove the CS by satisfying all the terms of appointment and recording the same.
• Pass a board resolution of removal of the CS in the board meeting after giving notice to all the directors of the company about the removal/resignation of the CS.
• File form DIR-12 with the Registrar of Companies within thirty days, along with prescribed filing fees.
• Inform the stock exchange where the company shares are listed, in the case of a listed company.
• Make the required entries in the register maintained to record company secretaries’ particulars.

The company should fill the vacancy of the position of the CS within six months at the board meeting. 

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