Company Secretary and its functions

This article describes about the Company secretary and the functions of the same.


A secretary is a representative of the company who is selected to carry out the ministerial or administrative duties. He is mainly anxious to make sure that the relationships of the company are accomplished according to the provisos of the Companies Act and articles of association of the company.

The Indian Companies Act, 1956 (as amended by the Companies Amendment Act, 1974) in Section 2(45) has expressed the term secretary as "any individual, possessing the prescribed qualifications, appointed to perform the duties which may be per by a secretary under the Act and any other ministerial or administrative duties".

The definition of Company secretary has given various points of concern they are that a person can only be appointed as a company secretary rather than the firm, he or she should have the qualifications prescribed by the Central Government and the duties have ministerial or administrative nature.


Section 2(45) of the Companies Act has given the guidelines for the qualifications of a company secretary. Under Section 383-A of the Act states that company with a paid up share capital should appoint a whole time secretary

There are two qualifications of company who can appoint secretary are the company having a paid up share capital of Rs.2 crores or more and the other one is that those companies having lesser paid up share capital.

Companies having a paid up share capital of less than Rs.2 crores

As it is not an easy appoint company secretary with the companies having a paid up share capital of less than Rs.2 crores might not appoint a whole-time secretary.

An individual having one or more of the following qualification be able to be appointed as a secretary for small sized companies such as he or she should be a member of the Institute of Company Secretaries of India; have passed the Intermediate examination conducted by the Institute of Company Secretaries of India; possessing a Post-graduate degree in Commerce or Corporate Secretary ship being approved by any University in India; Law graduate from any University; can be a member of the Institute of Chartered Accountants of India; an individual holding post-graduate degree or diploma in Management science granted by any University or the Institutes of Management i.e., Ahmedabad, Calcutta, Bangalore, or Lucknow, can be a member of the Institute of Cost and Works Accountants of India; should have Post-graduate diploma in company secretaryship granted by the Institute of Commercial Practice. Delhi, under Delhi Administration or diploma in corporate laws and management granted by the Indian Law Institute, New Delhi; or a Post-graduate diploma in Company Law and Secretarial Practice granted by the University of Udaipur, or should be a member of the Association of Secretaries and Managers, Calcutta.

.Besides these statutory qualifications he or she have got the general knowledge together with the knowledge of the industry and trade, so that he can make useful suggestion to directors. He should have a sound knowledge of different laws affecting the business. He should also have knowledge of economics, banking and finance. He must have a good personality as he is supposed to co-operate with the staff at all times.


The term 'Company Secretary' means an individual who is a member of the Institute of Company Secretaries of India. A Company Secretary can admit full time employment as secretary of a company or he may choose to practice independently as a company secretary, either individually or in partnership with one or more company secretaries. Section 6 of the Company Secretaries Act, 1980 describes that only a member of the Institute whether in India or elsewhere is entitled to practice with the condition that he should have obtained the certificate from the council a certificate of practice.

According to Section 2(2) of the Company Secretaries Act, 1980 has approve various areas of practice for a company secretary in practice such as to appoint himself in the practice of the occupation of company secretaries to, or in relation to, any company; or, offer to make or perform service in relation to the encouragement, forming, incorporation, amalgamation, reconstruction, re-organization or winding up of companies; or an offer to make or execute services as may be performed,


A company having paid up share capital of 2 crores or more, it is required to employ a whole-time-secretary. If companies are having paid up share capital of less than the prescribed amount, it is not required to appoint a whole-time secretary. Usually, every company appoints a secretary and the essential provision is made in the articles of association for the purpose. Nevertheless, each company is not obligatory to appoint a whole time secretary with a paid up capital of 10 lakh rupees or more but less than 2 erores shall file with Registrar a certificate from a secretary in whole time practice. The first secretary is usually appointed by the promoters. They help the promoters in carrying out all the preliminary work in relation to the formation of the company. They are termed as the 'pro-tern secretary' (secretary for the time being). Usually, the appointment of a company secretary is made by the Board of directors in their first meeting by passing a resolution. A service agreement is carry out between the company and the secretary in which the terms and conditions of his appointment, remuneration etc. are declared.


The appointment of a company secretary is usually done by way of a resolution of the Board of directors, and the same can be removed by the Board of Directors or by the managing director, if he is authorized by the Board. The terms and conditions of the service of the company secretary are stated in the service agreement. A clause is mentioned in the service agreement which describes the manner in which he can be dismissed or removed. He should be given due notice of termination of his employment according to the terms and conditions of his employment or else the company shall be liable to pay compensation to him.


The position of a company secretary has undergone a remarkable change during the last few years. He has come up from the position of a clerk to an essential body in the corporate chain of command. The position of a company secretary can be conferred as a Servant of the Company, as an Agent of the Company: as an Officer of the Company and as an Advisor to the Board:


The duties of a company secretary differ from business to business in accordance with its size, management structure and the personal qualifications of the secretary. The company secretary is usually assigned with legal, administrative and management functions. In big companies, there are separate managers who get themselves involve with the functions relating to accounts, law and personnel etc.The main role of the company secretary as the coordinator cannot be under estimated as he performs three fold capacity. as an agent of the Board of directors and as a person in charge of secretarial work relationship to the company and as chief administrative officer of the company. These duties can be classified into two categories (a) statutory duties, and (b) general duties. The statutory duties can be subdivided into two-duties under Companies Act and duties under other Acts. Besides the statutory duties, a secretary is required to carry out a number of general duties such as to carry out the orders of the Board of director, to assist the Board in the formulation of policy decisions, not to disclose confidential information relating to the affairs to the company, not to make any secret profits on account of his position, to act as a medium and link between the company and outsiders, to provide information to the shareholders and to organize, supervise and coordinate the office work


It is the duty and responsibility of a secretary to look into the affairs of the company and perform in accordance with the provisions of the Companies Act and articles of association. If a default is made to fulfill certain requirements of the Act, a secretary, being an officer of the company is liable for fine and punishment. The liability of a secretary can be statutory as well as contractual.


There are certain rights which are specified to the secretary by the Act, Board of directors and the general meetings of shareholders. He also obtains some rights from the service agreement with the company which usually include right to control and supervise the working of his department; right to sign documents requiring authentication by the company; right to be indemnified for any loss suffered by him while discharging his duties; and right to receive remuneration.


The company secretary performs an important role in company administration. The role depends on the size and nature of the company. He is accountable not only to the company, but also to its shareholders, creditors, employees and the society.
He usually performs three fold functions as a statutory officer, as a coordinator and as an administrative officer.


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