company secretary(for the students of B.com(professional)

Q1.Tell me something about the career of company secretary?


A1.The use of the word secretary in the name of this specialisation is a bit misleading for one who is new to the concept. A Company Secretary has nothing to do with regular secretarial work. A Company Secretary is a professional whose role in a corporate set up is that of an advisor for legal matters. As per the Companies Act, a statutory requirement is that companies with a paid up share capital of a minimum of Rs 50 lakh are required to appoint a Company Secretary. A Company Secretary is a very important member of the company’s management.

Q2.What is the role of "The Institute of Company Secretaries of India " ?

A2.The Institute of Company Secretaries of India is constituted under the Company Secretaries Act, 1980, to develop and regulate the profession of Company Secretaries in India. The origin of this profession can be traced back to 1960, when the Company Law Board started a course in Company Secretaryship leading to a Government Diploma in Company Secretaryship. A tremendous growth in the number of Company Secretaries led to the formation, in 1969, of The Institute of Company Secretaries of India under Section 25 of the Companies Act, 1956. The Institute of Company Secretaries of India has been converted into a statutory body under the Company Secretaries Act, 1980.

Q3.What does a Company Secretary do?

A3. The range of services that a Company Secretary is trained to carry out is wide. In actual practice, it will depend upon the size of the company he or she is working with. The nature of activities that the company is engaged in will also affect the type of services that a Company Secretary is required to provide. Functions of a Company Secretary A Company Secretary has been recognised by law as one of the principal officers of the Company. The knowledge that he or she acquires during training makes him or her versatile enough to carry out functions in various areas like finance, accounts, legal administration and personnel division. Training as a Company Secretary equips a person to provide the following services. Handling legal aspects that need to be covered for incorporation, formation, promotion, amalgamation, reorganisation or winding up of a company, are the responsibilities of a Company Secretary ¨ If a company goes public, then management of the public issue falls under the ambit of a Company Secretary's responsibility. ¨ All legalities involved with inter-corporate investments and loans are looked after by a Company Secretary. ¨ All responsibilities attached to meetings of Board of Directors are attached to the Company Secretary. He or she is responsible for scheduling them in consultation with other members of the management team, conduct the meetings and maintain all records related to the meetings. ¨ Depending upon the needs of the company that he or she is working for, a Company Secretary is required to handle matters related to central/state sales tax, excise laws, labour laws and corporate laws. ¨ Looking into the details of processing applications for management appointments and their remuneration is also the responsibility of a Company Secretary. ¨ A Company Secretary handles matters related to obtaining institutional finance. Responsibilities in this regard would include getting project approvals, obtaining relevant licences and permits, zeroing in on all requirements under the MRTP (Monopolies and Restrictive Trade Practices Act) and FERA (Foreign Exchange Regulation Act) and any other relevant legislation. ¨ The Company secretary is authorised to sign the annual returns of the company, as also represent the company when a situation demands it. The above-mentioned duties are just a broad guideline of what is expected of a Company Secretary.

Q4.Who can become a Company Secretary?

A4.The minimum eligibility required for the foundation course for training as a Company Secretary is 10+2 or an equivalent examination. Graduates or post-graduates in commerce, or any other discipline except fine arts, are allowed to skip the foundation course and enrolled directly for the intermediate examination. This exemption is also extended to those who have passed out of the Institute of Cost and Works Accountancy or the Institute of Chartered Accountants of India. For better prospects one may opt for the Company Secretary course after having completed either the Cost and Works Accountancy course or the Chartered Accountancy course or both. The course The Institute of Company Secretaries of India conduct examinations for different levels of competencies. Those who clear these examinations are granted membership to the Institute.

Q5.Where are the centres of the institute?

A5.The Institute has headquarters at New Delhi. Offices at Calcutta, Chennai, Delhi and Mumbai, four regional councils and thirty-six chapters of the Institute in various cities provide the infrastructure through which the Institute functions. This course is a mixture of postal tuition and optional coaching classes. Study material is provided to the students at the time of admission. On completion of postal coaching and contact classes, if the student has opted for it, he or she is eligible for appearing for the examinations conducted by the Institute. Registration for each examination needs to be done at least nine months before the month in which the examination is held. The examinations are held in June and December every year. Examinations are held at thirty-six centres.

Q6.What is the procedure for becoming a Company Secretary?

A6. It is as follows: Pass 10+2 or equivalent examination Enrol with the institute for foundation course Complete the compulsory postal coaching Pass the foundation examination Register with the institute for intermediate course. Graduates and those who have passed out of the Institute of Cost and Works Accountancy or the Institute of Chartered Accountants of India can enter straightaway at this level. Complete the compulsory postal coaching for the intermediate course. ¨ Pass the intermediate examination. Enrol for the final course ¨ Complete the compulsory postal coaching for the final course. During this period the student is also required to undergo management training or apprenticeship with a company recognised by the Institute or with a recognised practising company Secretary. The duration of the training may vary from 12 months to 24 months, depending upon whether it is done on a full time or part time basis. Pass the final examination. ¨ Undergo practical training for four months. Now a student qualifies for membership of the Institute On admission as an Associate member, he or she is entitled to use the descriptive letters "ACS" after his name. Senior members in the profession are eligible for admission as Fellow Members, and on admission as Fellow Members they are eligible to use the descriptive letters "FCS" after their names.

Q7.What are the places where examinations are held?

A7.The Institute has its headquarters at New Delhi and four regional offices of Calcutta, Chennai, Delhi and Mumbai. The Institute has four Regional Councils and under their jurisdiction there are thirty-six Chapters: Eastern Region: Bhubaheshwar, Guwahati, Jamshedpur, Patna, Ranchi Northern Region: Chandigarh, Faridabad, Ghaziabad, Jaipur, Kanpur, Ludhiana, Lucknow, Modinagar, Noida (U P), Shimla, and Udaipur Southern Region: Bangalore, Coimbatore, Cochin, Hyderabad, Madurai, Mangalore, Mysore, Pondicherry, Tiruchirapalli, Thiruvananthapuram, and Vishakapatnam Western Region: Ahmedabad, Bhopal, Dombivli, Goa, Indore, Nagpur, Pune, Surat, and Vadodara. In addition the Institute has 16 Satellite Chapters, which are located at Agra, Allahabad, Gurgaon, Jodhpur, Meerut, Beawar, Yamuna Nagar, Varanasi, Bhilwara, Bareilly, Dharwad, Kottayam, Thrissur, Vijayawada, Nasik, Raipur.

Q8.What are the prospects for employment ?

A8. Today's global scene shows a focus on the development of the corporate sector. Growth automatically translates into the involvement legalities of various kinds. And this falls under the purview of a Company Secretary. Companies need advice from a person with a thorough knowledge of all relevant laws. This service is provided for by the Company Secretary. So the employment potential in the corporate sector is very high. Openings are also available in government sectors, in bodies like the Bureau of Public Enterprises, government financial institutions and stock exchanges. Other government openings are the Accounts branch of the Central Government Law Services; the finance, law, accounts and merchant banking divisions of nationalised banks. An option for the academically inclined is as lectures in universities. A combination of experience and expertise can lead to appointment at top level positions like chairman, directors and managing director, in reputed organisations

A Company Secretary acts as a mediator between the company, its board of directors, stakeholders, government and regulatory authorities. A Company Secretary is a professional, who has expertise in corporate laws, capital markets, security laws and corporate governance. He/She is the one who advises Board of Directors on the kind of practices to be adopted in corporate governance.

A Company Secretary is an important official who ensures that best management practices and work ethics are followed to create wealth creation for the company. He/She is the one who represents the company for internal and external stakeholders, co-ordinates the policies of the company and management function, guides on the strategic decisions for the betterment and growth of the company like merger, acquisition and joint collaboration.

Company Secretary Roles:

A Company Secretary should ensure the well-being and growth of the company, its Board of Directors and all Stakeholders

• A Company Secretary should make sure that the procedure for appointment of directors is followed properly. He/She should also ensure that the newly-appointed directors have a proper induction and special training organized, if the need be.

• He/She should also provide all types of support and guidance to the directors, helping them in discharging their duties.

• A Company Secretary should ensure that all statutory and regulatory requirements are properly complied with. They play a key role in ensuring that the decisions of the Board on the whole are properly implemented and communicated within the organization. They should advise the company and its board of Directors on business ethics and corporate governance.

• A Company Secretary should also ensure that the interest of the stakeholders are safeguarded and should communicate with them on regular basis.

Company Secretary Duties and Responsibilities:

• A Company Secretary is the person who is responsible for organizing board meetings, informing board of directors about the impending meeting, formulating the agenda of the meeting with Chairman and/or Chief Executive, compiling the minutes of the meeting and maintaining minute books.

• A Company Secretary has to ensure that Annual General Meetings (AGM) are held as per the Companies Act and the companies’ Article of Association. He/She is responsible for issuing notices of meetings, distribution of proxy forms, helping directors update themselves and getting prepared in case any shareholder ask questions, helping directors prepare briefing material and ensuring that security arrangements are done for the meeting. During the meeting, they have to ensure that proxy forms are processed properly, voting is carried out properly and recording the minutes of the meeting.

• A Company Secretary has to ensure that the Memorandum and Articles of Association is properly complied with. In case any amendments are issued, they have to make sure that they are implemented in the right manner.

• He/She had to make sure that company complies with the Yellow Book requirements and it properly implements the model code and/or company code regarding the company’s securities. He/she has to maintain relations with Stock Exchange through company’s brokers and he/she is responsible for relaying information regarding the company to the market.

• He/she is responsible for maintaining the statutory registers regarding the members, company charges, directors and secretary, directors’ interests in shares and debentures, interests in voting shares and debenture holders.

• Company Secretary is responsible for filing annual reports, amended Memorandum and Articles of Association, return of allotments, notices of appointments, removal and resignation of directors and the secretary, notices of removal or resignation of the auditors, change of registered office and resolutions in accordance with the Companies Act with the Registrar of Companies.

• They are responsible for the publication of the company’s annual report and accounts.

• They have to maintain the company’s register of members, deal with questions of the shareholders and transfer of share-holding etc.,

• They have to regularly communicate with shareholders – both individual and institutional -- through circulars and notices, and ensure the payment of dividends and interest. They have to keep an eye on register of members in case any stakeholder is aiming at taking over the company.

• He/She has to play a key role in implementing acquisitions, disposals and mergers. They have to make sure that proper documentation is in place and proper commercial evaluation is done.

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Company Formation with Memorandum Articles Association:

Following are the steps by which a company can be formed:

• The proposed company name should be approved by the registrar of companies.

• Secondly, the memorandum and articles of association of articles should be prepared.

• Suitable persons should be appointed for the subscription of memorandum of association.

• Registration fees should be deposited to registrar of companies and receipt of certificate of incorporation should be collected.

• Business commencement certificate should be collected from the registrar of company.

A company who wants to register with the registrar of companies should give the following details:

• Details of directors, company secretary and members.

• That company should have a registered office.

Procedure to set up a company as per the Memorandum of Articles Association:

Once all the details are provided to the registrar of companies the following procedure should be done to set up a company:

• The first and foremost step to register a company is to choose a company name.

• Before choosing a company name the following things should be kept in mind:

• The company name should not already exist in the registry.

• The names which are likely to cause offence should not be allowed.

• The use of certain words is also restricted.

Once the name is decided then the following documents should be given to the registrar of companies:

• A memorandum of association.

• Articles of association.

• Form 10.

• Form 12.

Memorandum and Articles of Association

Memorandum of Association:

This document should contain

• The company name.

• The address where the registered office of the company is located.

• The objects of the company.

• The name and addresses of the directors of the company

Depending on the type of the company other clauses can be included in the memorandum.

Memorandum and Articles of Association:

The rules regarding the company's internal affairs are prescribed in this document. The subscribers signed the company's articles in front of the witness which are ultimately delivering to the registrar. These witnesses also attest the signatures.

Memorandum and Articles of Association Form 10:

In this form the details of the first director, secretary and the address of the registered office is required. Also the directors have to give their birth and occupation details, as well as the details of the directorships they held within the last five years.

Memorandum and Articles of Association Form 12:

Form 12 must be signed at the last when all the registration requirements have been completed and this form is signed in the presence of commissioner.

So memorandum and articles of association play an important role in company registration process.

Memorandum and Articles of Association Advantages:

• Minimum subscription is not required.

• Company's can easily raise the sufficient capital through shares.

• These are appropriate for the business persons who have the limited capital.

• Even the non resident shareholders are not responsible for the additional tax on dividends.

• Accounts of any currency can be freely transferable without any exchange control restrictions.

Memorandum and Articles of Association Disadvantages:

• The expenses for the company formation are very high.

• The alteration of memorandum is not so easy.

• The procedure for the establishment and the legal formalities are very complicated.

• The administrative costs and the tax payment are very high.

• In the private company shares cannot be sold to the public.

• The problem of management occurs when directors are not able to manage the company as the sole traders do.

Characteristics of a good secretary

The role of Secretary of a Management Committee can be key to the efficient functioning of the Committee, particularly in organisations with few or no paid staff members. Below are some of the qualities, skills and knowledge which should be demonstrated by those carrying out this role.

Quality, skills & knowledge

A good Management Committee Secretary will:

• be methodical, with a good eye for detail;

• be well organised, with an orderly mind;

• bring objectivity to the proceedings;

• deal promptly with correspondence;

• be able to take accurate notes of meetings;

• make sure members receive all the necessary material;

• bring the necessary material to the meeting;

• work well with the Chairperson;

• ensure quorum is met for meetings; and

• have knowledge or experience of committee procedures.

Do's and Don'ts

A good Secretary will: A good Secretary will NOT:

• Be organised. • Ignore correspondence.

• Keep copies of all correspondence. • Keep information to her/himself.

• Check quorum is met for meetings. • Be late for meetings.

• Respect confidentiality. • Throw away important papers.

• Work closely with the Chairperson. • Write down trivial details of all discussions at every meeting.

• Make it easy for others to take over by keeping clear records. • Rely on his/her memory.

• Prepare for meetings well in advance. • Repeat private conversations.

• Summarise discussions effectively. • Organise meetings at the last minute.

• Keep people informed. • Ensure accurate minutes of meetings are kept.