The company secretary is a building block of a company; he must perform his duties with reasonable care. Other than being a legal mentor he must ensure all business procedures to be matching with all legal provisions; if not complied he may be held responsible for misconduct and may be dismissed on grounds of dishonesty or infringement of legal rights of the company.
Duties as per Companies Act:
- To initiate and carry incorporation procedures like authenticating documents and proceedings used in registration; assuring delivery of registration and allotment details to registrar; making application for increase in share capital; overseeing delivery details of share certificates of allotment; keeping records of share warrant holders; to comply & file annual return; releasing statutory declaration to receive commencement certificate; managing statutory books; giving meeting updates and notices of general meetings to every member; signing and authenticating financial reports and statements (Balance Sheet & Profit & loss statements ) in cases of non-banking financial companies; filing resolution with registrar and preparing minutes of all General and Board Meetings within 30 days.
Duties as per Income Tax Act:
- To verify and submit attested returns & forms; to oversee authentication and filing procedure of TDS (Tax Deducted at source); ensuring that proper TDS is being deducted from the salary of employees; ensuring TDS reports are well maintained and submission of TDS to government is duly done.
Duties as per Other Acts:
- Obtaining government approvals; complying with regulatory procedures of Industrial disputes; FEMA Act; State Insurance Act; Depositories Act 1996; Foreign Exchange Management Act; monitoring and complying with various legal laws like Labour laws; Competition Laws; Environmental laws, etc.
Other General Duties of a Company Secretary :
- Advising authorities and BOD (Board of Directors) in risk management; business policies and strategies; corporate social responsibilities; brand equity & image building; managing intellectual rights of the company; ensuring healthy communication between stakeholders; authorities and government.
Key Responsibilities of a Company Secretary in Practise
- CS as a Business Benefactor: The Companies act gives specific right to a company secretary– to exercise promotion and incorporation of companies; to handle company audit and certification services; to sign annual returns; to handle corporate restructuring and takeovers; to scrutinize reports and voting procedures in a transparent manner; to administer revival of sick companies; to become a technical member of Company Law Tribunal; to investigate cases of taxation and corporate affairs.
- CS as an Auditor: To ensure corporate discipline and compliance with the laws; the Companies Act confides a company secretary to annex a Secretarial Audit Report to the authorities in form MR-3 ensuring compliances of the company with procedures defined in general laws and legal acts; to report any offensive matter of fraud found to government.
- CS as an Advising Agent: CS works as advising agent in cases of – issue of shares; drafting of prospectus/sale letter/issues related to securities/private placement and buyback of shares; raising funds from international markets; loan syndication and documentation; income tax planning; drafting of legal documents; in matters of intellectual property rights; guiding in policies of merger; amalgamation and joint ventures, etc.
Statutory Restrictions and Powers of a Company Secretary
A Company Secretary is legally bounded to restrictions and liable policies defined by ICSI and various regulatory authorities. As a representative body of a company he is- liable for any negligence done on his part which may result in the discharge of his duties; liable for doing anything beyond his authority; under the obligation of keeping secrets of a company from outsiders; liable to be dismissed on account of making any secret profits from company. Other than this he – cannot enter into a contract on behalf of the company unless authorized by directors; cannot borrow money in name of the company; cannot acknowledge a debt against a suit against a company; can not register or transfer shares without due authority of BOD.
Conclusion:
The role of company secretaries is at the pace of growth in Indian companies; with an increase in number of compliances the need and responsibilities of CS cannot be neglected. If a company does not comply with the advent procedures of Companies Act and other authoritative laws; it may run into a number of penalties to which only a Company Secretary counters.