Secretarial Practice- Duties, rights, liabillities of a company secretary

1. Meaning
⮚Link between Directors and shareholders
⮚Medium through which company communicate with outside
world
According to Oxford, Secretary is
✔One whose office is write to another
✔Employed to conduct correspondence
✔To keep records
✔To transact other business for another
(person/society/corporation/public body)
✔Starts with floatation and ends with liquidation
COMPANY SECRETARY

2. COMPANY SECRETARY
❑Only an individual
❑Either member of Institute of company secretary of India or has
requisite qualification by central government
❑Ministerial and administrative (focuses on making the best
possible utilization of the organization's resources), not only
managerial (managing people and their work)
•Routine Secretary – Entrusted with routine duties
•Executive Secretary – limited executive powers of management

3. Definition
A person
Who is a member of COMPANY SECRETARIES OF
INDIA
And any other individual possessing
Prescribed qualifications
Appointed to perform the duties
Which may be performed by a secretary under
this companies (Amendment) Act, 1988
And any other ministerial or administrative
duties

4. Routine Duties of Secretary
✔Office administration, writing letters, reports,
proceedings and minutes of meeting
✔Filing of various “returns” and “statements”
✔Has to comply with Companies Act, Securities
contracts Act, Foreign Exchange Management Act,
Income Tax Act and other economic laws.
✔Carry out policy laid down by management
✔At times help them in shaping that policy

5. Appointment
❖At first secretary appointed by – PROMOTERS at
pre-incorporation stage
❖After Registration of the company, appointment
should be confirmed at the First meeting of the
Board of Directors
During that, Remuneration and allowances payable
are fixed
❖ Person acting as pro tem or provisional secretary during incorporation has
no defence (no job security), if he is not employed after incorporation.
❖ During Registration, his position does not improve even his name is
in the Articles of the company(Articles of Association constitute a contract
between company and its member only)

6. The agreement specifies the terms and conditions
✔Of service
✔Nature and scope of secretary’s duties
Appointment
Every appointment of secretary
✔Must be recorded in the register of Directors
✔Notice of his appointment must sent to ROC

7. Whole Time Secretary
•Company having paid up share capital of 2 crore or
more
•Where Board of Directors have only 2 Directors and
the both are not the secretary of the company
•Working as Whole timer cant be accepted to work
for another company
•Officer of the company (Secretary) is in default shall
be punishable with fine of rs. 500 Everyday
Appointment

8. Part Time Secretary
•Who accepts appointment as secretary in more than one
company
•For small size company
•None of the company has paid up share capital of Rs. 2
crore or more
•If a person is secretary of more than one company his
knowledge as secretary of one company is no notice to
him as secretary of the other company unless it is his duty
to the first company to the communicate his knowledge
to the second company (i. e if he didn’t inform the first
company about the second, he need not inform the
second)
Appointment

9. •No director of a company shall hold any profit or
place of company (unless consented by
company)
•Not advisable (in case of private company
having 2 directors and public company having 3
directors)
Appointment
Director as Secretary

10. As a servant of the company
❑ Duty is to act in accordance with instruction
given to secretary by Directors
❑ He do what he is told and no person can
assume that he has authority to represent
❑ Secretary cannot
✔ Summon a general meeting on his own
authority
✔ Register a transfer of shares unless instructed
to do so
✔ Borrow money for the purpose of the
company without like authority
General Legal Position of a Secretary

11. •Also an agent of the company in restricted sense
•Authority to enter into a contract on behalf of
company matters connected to office administration
•As Agent he must conduct a business with
reasonable care and diligence
•Liable to any secret profit made by him
•If secretary works within his liability and scope
described by company, Company is responsible. If
not, Secretary is responsible.
General Legal Position of a Secretary
As an agent of the company

12. General Legal Position of a Secretary
As an Officer of the company
•Officer in default
•Liability to statutory penalties by reason of Non-
compliance with law
•Also held liable for default in holding the statutory
meeting and filing the statutory report, manage
proceedings
•If the particular department cant manage a paper or
problem, refered to company secretary

13. Duties of Secretary towards Company
● Make “Statutory Declaration”
● Sign “Annual Report”
● Sign “Balance sheet and every profit and loss account” (for non-banking companies)
● Filing of number of returns, documents, notices with REGISTRAR OF THE COMPANY
●