Statutory Duties and Liabilities of Company Secretary

     

Statutory Duties and Liabilities of Company Secretary

Apart from general secretarial duties with regards to organizing Board and general meetings, keeping minutes of the meeting, recording approved share transfers, corresponding with directors and shareholders, maintaining statutory records, filing necessary returns with Registrar of Companies etc., the Companies Act, 2013 has also prescribed some duties and authorities, which are as follows

   1.  Declaration regarding compliance with the requirement of registration

In terms of section 7(1) (b) of the Companies Act, 2013, a company gets incorporated by submitting memorandum and articles duly signed along with a declaration in a prescribed form that all requirements of Act and rules have been complied with in respect of registration of company. Such declaration in prescribed form can be signed by an Advocate, a chartered accountant, cost accountant or company secretary in practice who is engaged in the formation of the company and by a person named in the articles as a director, manager or secretary of the company.

2.  Authentication of documents, proceedings and contracts

Authentication is more than simply attestation. Authentication is attestation made by the proper officer by which he certifies that a record is in due form of law and that the person who certifies is the officer appointed to do so. A document or proceeding requiring authentication by a company or contract made by or on behalf of a company may be signed by any key managerial personnel or an officer of the company duly authorized by the Board in this behalf. [Section 21]

3.  Signing share certificate

Share certificates of the company should be signed by two directors (out of which one should be Managing Director or whole-time director, if appointed) and Secretary or other person authorized by Board.

4.  Signing annual return

Annual return to be filed with Registrar of Companies has to be signed by a director and Company Secretary. If company does not have Company Secretary, the return can be signed by company secretary in practice.[Section 92(1)]

5.  Signing of financial statements:

The financial statement of a company is required to be signed on behalf of the Board at least by the Chairperson of the company or by two directors out of which one shall be Managing Director and the chief executive officer (If he is a director), the chief financial officer and the Company Secretary wherever they are appointed [Section 134(1)]

6.  Appear before NCLT:

A Company Secretary can appear before National Company Law Tribunal (NCLT) on behalf of the company [Section 432]

7.  Secretary of audit committee:

Company Secretary will be secretary of Audit Committee which is required to be formed by listed companies as per Corporate Governance Code prescribed by SEBI through listing agreement.

8.  Secretary as Compliance Officer of listed company:

As per clause 47 (a) of the equity listing agreement of the stock exchange (NSE, BSE), a listed company is required to appoint the company secretary to act as ‘Compliance Officer’, who will be responsible for monitoring the share transfer process and report to Company’s Board in each meeting. The compliance officer will directly liaise with SEBI, stock exchanges, ROC, investors etc.

9.  Demat shares:

Secretary has to coordinate between depository and stock exchange in case of demat shares.

10.  Additional duties:

In addition to the statutory duties of a company secretary, he is often entrusted with additional duties like looking after legal matters, personnel matters, finance and sometimes even general administration.

Liabilities of Company Secretary

Company Secretary has been defined as ‘Officer in default’ along with Managing Director, Manager and Wholetime Director etc. Thus, he can be punished in respect of offenses under Companies Act. A Secretary is guilty if he was responsible to the company for the conduct of its business.

Summons to the company in civil matters can be served on a  secretary

As per rule 2 of order 9 of Code of Civil Procedure, in case of a suit against a corporation, summons can be served on

(a)    Company Secretary, Director or other principal officer of the corporation or

(b)    By leaving it or by sending by post to the registered office of the corporation.

However, the Validity of this provision has been upheld in Jute & Gunny Brokers v. UOI (1962) 32 Comp Cas 845 (SC).

Related Post :

Procedure For Appointment of Company Secretary

Draft Board Resolution for Appointment of Company Secretary

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