ROLE OF COMPANY SECRETARY IN NEW COMPANIES ACT, 2013

The long awaited Companies Bill finally made its way on 29August, 2013 with its notification on 30 August 2013. The new Companies Act, 2013 will replace the nearly 6 decades old Companies Act, 1956. With the introduction of new act a huge change will take place in corporate sector. The new Act has emphasised on increasing corporate transparency with high standards of corporate governance norms. The new Act places huge responsibility on the professionals by imposing stringent actions against them in case of non compliance of provisions

The new Act has enhanced the role of company Secretary and has bracketed CS as Key Managerial Person. . It has also recognised CS as officer in default in case of non compliance.

In the light of the new Act the role of CS lies in the following key areas:

Section 203 has made the appointment of Company Secretary or Key Managerial Person (KMP) mandatory for a certain class of company as prescribed by Central Government

Secretarial Audit has been introduced under section 204 of Companies Act, 2013. This section applies to listed companies and other companies as may be prescribed by Central Government. The introduction of Secretarial Audit has a huge impact in the history as for the first time recognition to non financial standards has been given. The Board is bound to give explanations on any qualification, adverse remark given by a Practising CS in such report.

In order to bring standardisation, integration and harmonisation in diverse secretarial practises SSB has formed 10 Secretarial Standards. Section 118(10) deals with Secretarial standards and are applicable to all companies.

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The role of CS has been further elevated by increasing his participation in corporate restricting and valuation.

Section 143(12) delegates the duty on professionals to report fraud or any suspected fraud which he has come across during the course of his performance of his duties. The professional includes Practising CS conducting secretarial audit as well.

Section 291 of the new act empowers CS to assist liquidator in the performance of his duties and functions in liquidation, subject to approval of Tribunal.

Section 205 defines the duties of CS for the first time in Law. The duties of CS include reporting to the board about various compliances applicable to the company and adherence to applicable SS as well. This section castes a huger responsibility on the CS to exhibit his duty as to meet the expectation of stakeholders.

In the context of incorporation of companies, CS will act as a certificate. It will be his duty to ensure compliance with regard to company’s incorporation and a declaration regarding the above is to be made by him.

Section 409 of companies Act has opened the gates of opportunity for CS to become members of the tribunal. The act provides that a practising CS, having a work experience of 15 years can become technical member of National Company Law Tribunal.

Section 432 empowers Company Secretary to present the case before Tribunal or Appellate Tribunal as the case may be.

In case of companies which had its shares listed on Stock exchange a CS is entrusted with great responsibility of compliance ensuring prohibition of insider trading and adherence to provisions of SEBI regulations

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An annual return is the most comprehensive document containing Information about the company’s Share Capital, directors, shareholders, indebtness both present and past. Much reliance is placed on Annual Return by shareholders, regulators and judicial authorities’ .Section 92 of Companies Act, 2013 has widened the scope of CS by providing that certain class of companies based on the parameters of share capital and turnover are required to certify their Annual Return by a CS in practise. The certification by the professional will be conclusive proof that all the provisions of the section have been complied.

CONCLUSION

The new companies Act has emphasised that with greater power comes greater responsibility .The role of CS is now no more as rosy it seems to be it is burdened with onerous responsibility.

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