Company Secretary

The Corporate Leader

Company Secretary: The Corporate Leader

Submitted in partial fulfillment of the requirements for the award of the certificate of e-Executive Development Program

Submitted to

The Institute of Company Secretaries of India (ICSI)

With the association of

Gurukul Online Learning Solutions (GOLS)

Submitted By: Shivam Gupta 221026920/02/2011 e-mail : [email protected]

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Declaration
I hereby declare that the Project Report entitled Company Secretary: The Corporate Leader submitted for the award of the certificate of e-Executive Development Program is my original work and the Project Report has not formed the basis for the award of any degree, associate ship, fellowship or any other similar titles in this institute.

Place: MuzaffarNagar Date: 09/September/2012 Signature of the student

Submitted By:
Shivam Gupta 221026920/02/2011

Company Secretary3

In the present scenario, Company Secretary is the most coveted profession available in the world. A Company Secretary is the backbone of a Company. CS Course is basically related to Corporate World. It transforms students to the modern corporate professional. A Company Secretary is a member of Institute of Company Secretaries of India.

Meaning of a Company Secretary:

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. Importance: The importance of the Secretary is specially felt in the business world since th ebusiness organizations have to abide by certain legal requirements. The secretary is entrusted with the responsibility for due compliance with all such legal formalities. The secretary also acts as a liaison officer between the management and the staff as well as the outsiders. Company Secretary in whole time practice: 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. Who can practise: According to section 6 of the Company secretaries Act 1980, only a member of the institute whether in India or elsewhere shall be entitled to practice provided he has obtained from the council a Certificat eof Practise. Appointment of a Company Secretary: 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 wholetime 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 Crores shall file with Registrar a certificate from a
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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 'protern 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. Removal of the Company Secretary: 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. Position of a Company Secretary: 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. Duties of a Company Secretary: 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 estimate das 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.

Liabilities of a Company Secretary: 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
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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. Rights of a Company Secretary: 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. Role of a Company Secretary: 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. Role of a Company secretary as a Statutory Officer: The role of the Company Secretary includes: 1.To ensure compliance with statutory requirements as prescribed under several laws. 2.To maintain the statutory books. 3.To file the statutory returns. Role of a Company Secretary as a Coordinator:
The Secretary is responsible for transmitting the policies and decisions of the board, to all level in t he company & the outsiders. Company Secretary plays a vital role in the following context:

1.In relations of Share Holders 2.In relation of Government 3.In relation to Community Role of Company Secretary as an Administrative Officer: The principal duty of a Secretary as an administrator is to ensure that the activities of a company are in conformity with the companys policy.

Prefix of CS: The council of the ICSI has decided that a member of the Institute may prefix CS to his name in order to distinguish himself from other professionals and to create brand image of the CS profession. Contract of Appointment with secretary: The position of Secretary in a company is a very important. He is the person who acts as a bridge between Board of Directors and the shareholders. Every information from all departments, divisons, branches and shareholders and other concerned with the company converges in his office. He collects all the informations, arrange in a systematic way and present the desired information to the board. The company secretary is expected to be expert of various laws viz Company Law, excise, custom, and Income tax and so many more. Usually the appointment of a company secretary is made by an appointment letter signed and issued by the Chief Executive officer. A Company Secretary is a senior managerial position which exists in private as well as public organizations. In the United States such a position is known as corporate secretary. The principal role of a Company Secretary is to ensure that the administration of a company is efficiently ruin, in accordance with the rules and regulations of the state or states where the company and its offices are located. Also, the decisions which are taken by the Board of Directors of a company are implemented effectively under the guidance of a Company Secretary. Despite the name which is given to such a role, it is not even close to being a secretarial or a clerical role. When an organization is formed there are many legal and legislative norms that it needs to comply with which vary from state to state and country to country. Compliance of such rules and regulations is the prime responsibility of a Company Secretary. Such a role has also the responsibility of informing the board of a company of its legal responsibilities. The legal documents which are signed for a company, the legal representative who takes on responsibilities is the Company Secretary. Thus, such a person also needs to ensure that the right communication is taking place with the shareholders of a company and company records, annual accounts are duly maintained. In India there are provisions in the Companies Act whereby the role of a Company Secretary is defined. Every company which has a paid up share capital exceeding Rs. 50 million or 5 crores, is required by law to appoint a Company Secretary. In India, such an appointed person needs to be a member of the Institute of Company Secretaries of India. When a company has ten lakhs or more paid up capital, it does not need to have a full time Company Secretary but a compliance certificate has to be signed by a practicing Company Secretary in the presence of the Registrar of Companies. These rules are specified in Section 383 A of the Companies Act of1956. In India, a Company Secretary has several responsibilities such as signing of the annual returns of a
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company which is listed on the stock exchanges of the country. They can also issue various certificates on behalf of the company. Company secretaries are professionals who are known as parachute professionals since they are said to parachute into the boardroom of corporate offices from day one in their CS careers. It might sound a little exaggerated, but it is true that a Company Secretary is someone qualified to advise the board on the legalities of their decisions and to look into all forms of governance and administrative matters. There are many companies which require a Company Secretary. No matter what industry a company operates in, there are always legal aspects of every function that a company needs to deal with to remain on the right side of the law. And with most companies now being listed on the stock exchanges, it is imperative that a company practices good corporate governance and communicates effectively to shareholders to hold the confidence of the market. For consulting on all such functions a Company Secretary is mandatory by law in most cases. Since the opening up of the Indian economy, there are many large corporate and companies today in India, private as well as public. These provide ample career opportunities for company secretaries. Any organization which has a board or council structures needs the services of a Company Secretary; then again, central government offices mostly require company secretaries to look into the legal functions. Many banks, especially the nationalized ones, have finance, law, accounts departments which require the expertise of company secretaries. Thus, there are career opportunities for company secretaries in the banking sector as well. Companies today, even if they have a paid up capital less than five crores, often opt to have a certified Company Secretary on their rolls for a variety of reasons. When a company gets listed on a stock exchange of the country, they need to issue annual statements which a Company Secretary is authorized to sign. Communication between the management and the shareholders is another important role of a Company Secretary. Such professionals can also advise different functions on their legal aspects such as production, finance, sales, manufacturing, administration and others. Contracts to be signed, certificates to be issued all need the expertise and authorization of a Company Secretary. Thus, there is scope for company secretaries in all types of industries, from public to private. Jobs for Company Secretaries: There is no dearth of jobs for Company Secretary roles in India. And as far as projections go, India is likely to need more company secretaries in the coming years, given the various empowerments which have been provided to such certified professionals and the growing corporate sector in the country.
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A person who is qualified as a Company Secretary has gone through rigorous study and training in various fields of commerce, legal and corporate matters and hence becomes competent to take up responsibilities in different functions in various industries such as finance, accounts, secretarial, personnel, administrative, legal and others. Their services are required in both private and public sectors. Though by law it is mandatory for companies having a paid up share capital of five crores or more to employ a Company Secretary in their rolls, every type of organization which is run by a board or trustee structure, is listed on stock exchanges, is a co-operative society, federation, association, statutory authority need the services of a qualified Company Secretary to advise them on all legal matters. Thus, all such organizations can offer jobs of Company Secretary positions to such qualified individuals. Again, qualified company secretaries can choose to work as independent professionals or as consultants in secretarial firms where they offer their services to organizations on various corporate and statutory matters. From joint ventures to conciliations, arbitration cases, project planning and management, take overs, acquisitions, listing on stock exchanges and others, their range of topics on which they are authorized to provide expertise and authority are vast. In many cases, practicing company secretaries need to issue compliance certificates as made mandatory by the Companies Act, the SEBI Act, the Exim policy, the Depositories Act and others. Many banks, especially the nationalized ones, have their separate legal, finance, administrative departments which require the role of a Company Secretary. All major public organizations and Central government ventures require the employment of a Company Secretary under their rolls. However, the modern private sector with the listed companies is the new age recruiter of such professionals. With the rapidly changing corporate scenario complete with takeovers, joint collaboration, foreign collaboration and other such issues which crop up in the business scenario of a company, the requirement is essential of a Company Secretary to advise on such statutory and legal maters. Even normal functions of a company such as productions, sales, finance departments need the services of a Company Secretary for drawing up contractual agreements, setting the legal terms in many forms of documentation and other vital functions. Educational Requirement of Company Secretaries: A Company Secretary is a position which is required in most countries in both private as well as public organizations. When a company has a certain amount of paid up capital of shareholders invested in it, the role of Company Secretary becomes important in the company. Ensuring the proper functioning of the board of a company in accordance with the governance and corporate laws in a country or state and maintaining the interest of shareholders by ensuring proper communication of the companys workings and other documentations are the prime responsibilities of a Company Secretary. In India, the Companies Act defines the role of a Company Secretary. It says that every company which has a paid up share capital of Rs. 50 million or 5 crores and exceeding such an amount,
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need to appoint a Company Secretary. In case of companies whose paid up capital is not less than ten lakhs, may not appoint a full time CS but need to have a compliance certificate issued by a practicing Company Secretary. There are guidelines laid down in the Companies Act, 1956, Section, 383 A by which the responsibilities and duties of a Company Secretary role in India are specified. The qualification for Company Secretary Course is essentially the same up to a basic level for those who wish to take up a career as a Company Secretary. One needs to pass the higher secondary examination at the high school level to enroll in the foundation course which is there for a Company Secretary. Foundation course exam can be taken only when one successfully passes the higher secondary or equivalent examination. Graduation must be completed and a masters degree is also preferable by the time one enrolls in the intermediate courses or passes the foundation course. The intermediate courses must be cleared before one can proceed to the final course. The final course of a Company Secretary once completed, along with additional certification in usage of MS Office, fully equips one to take up a job as a practicing Company Secretary. Besides these certifications, one also needs to have a good command over communicative English and business communication skills. One should be of an analytical bent of mind so that the regulatory frameworks and policies can be effectively utilized or altered as per the needs of the workings of a company. Managerial abilities such as planning, strategizing need to be inculcated in individuals who wish to excel in a career as a Company Secretary. Responsibilities of Company Secretary: A company secretary is an official or a representative who is appointed for carrying out administrative as well as ministerial duties. A company secretary mainly focuses on the well being and the growth of the company. The role of a company secretary is of utmost significance for a company as the growth of the company is largely dependent on the duties performed by a company secretary. There are huge responsibilities which need to be performed by a company secretary. A company secretarys main responsibility is to organize board meetings, to notify the board of directors on the upcoming meeting, to prepare the agenda of the meeting either with the chief executive or the chairman, and to maintain the minutes of the meetings in records for future reference. Annual General Meetings need to be scheduled as per the companys article of association and companies act. A company secretarys duty is to prepare the board of directors to handle questions raised by stakeholders, and to distribute the proxy forms. A company secretary should ensure that security arrangements are being done properly in order to avoid any kind of disruption. The Articles of Association and Memorandum need to be gathered by a company secretary. If the situation of amendment arises then a company secretary should ensure that it is being implemented in an appropriate manner.
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A company secretary needs to maintain the legal registers about the members, charges of the company, secretary and directors, shares and debentures, debenture holders and voting shares. A company secretary is responsible for filing revised Memorandum as well as Articles of Association, resignation and discharge of directors, return of allotments, appointment notices, and lastly change in registered office in agreement with the companies act. A company secretary is responsible for publicizing the companies account as well as the annual reports. She/he needs to maintain the register of the company of members. A company secretary has to deal with transfer of share holding, and questions raised by the stakeholders. There should be a regular communication with share holders, both institutional and individual through notices, circulars and also take care of payment of dividends as well as interest. A company secretary needs to be cautious with the register of members to ensure that no stakeholder tries to take over the company. A company secretary is also responsible for ensuring that the commercial estimation is done properly and documents are in place. Company Secretary Recruitment: Company Secretary is a specialized profession which consist of qualified professionals who undergo rigorous training to obtain such specialized knowledge invaluable to corporate, both public and private. Company secretaries in India are a specialized group of qualified professionals who undergo the certification course from the Institute of Company Secretaries of India. This course consist of extensive coverage of subjects like governments policies, corporate laws, taxation structures, corporate governance, managerial techniques and so forth. Once Company Secretary certification is obtained, such individuals can gain employment in different industries as well as can opt to practice as independent professionals or consultants in secretarial firms. Company Secretary recruitment is a specialized field wherein recruitment firms concentrate on matching clients requirements with company secretaries having matching qualifications and experience. Company secretaries by the Companies Act of 1956 are required to be employed by companies which have a paid up shares capital of five crores or more. Smaller companies also need to have compliance certificates issued by practicing company secretaries. Since such professionals can provide many legal and advisory services to companies, they are sought by many companies even if it is not mandatory by law. There are many recruitment firms which specialize in Company Secretary recruitment. Many companies seek company secretaries with many years of experience who can assist board of directors or shareholders of a company on many legal and statutory matters. Such individuals need to be sought out in the market, especially those who have domain knowledge in similar industry. Recruitment firms which specialize in Company Secretary recruitment first understand the client companys requirement as to what job profile the Company Secretary would have to
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perform in the company. While many senior positions involve interaction with shareholders, board members or trustees, there might be junior secretarial positions who are required to look into the legal aspects of documentation, draft out agreements, negotiations, copyrights, contracts and so forth. There are many job portals nowadays such as Naukri, Timesjobs, Shine, Monster to mention a few, which have extensive listings of various professions including company secretaries. In these sites there are many listings for Company Secretary jobs by consultants as well as by companies. Such professionals can also register themselves on these sites or with such recruitment consultants to find jobs of their choice. Many company secretaries wish to specialize in different industries or wish to become consultants in secretarial firms. One can find careers of their choice through such job portals which connects prospective employers with interested employees. The Institute of Company Secretaries of India: Every country has a regulatory body which serves as an umbrella organization for practicing company secretaries in that country. The name of this profession may differ from country to country but they have similar allocated legal and corporate functions which makes this role vital for large corporate companies. Similarly, the institute which develops Company Secretary professionals in India is known as the Institute of Company Secretaries of India or ICSI for short. It is a professional statutory body which has been constituted under the Company Secretaries Act of 1980 which was passed by the Indian Parliament. It is the sole organization in India which is authorized to develop, train and regulate the Company Secretary professionals. Those who pass the three course professional program as well as managerial training are awarded the certificate of being a Company Secretary and they also can become members of the institute. ICSI has its headquarters in the capital city of India, Delhi and has regional offices in cities like Mumbai, Kolkata, Chennai. The institute was formed in 1960 when the then Company Law Board started such a course which awarded the Government Diploma in Company Secretaryship. As the popularity of the course grew and the number of students increased, the Institute of Company Secretaries of India came into being in 1968 to conduct the CS examinations. In 1981 the institute was awarded the status of a statutory body under the Company Secretaries Act which allowed it to issue certificates in its name. Today it has over five thousand fellow members and over two lakh registered students who are at various levels of the three programmes. The ICSI not only conducts the Company Secretaryship exams but also provides other facilities to students and registered members. These include practical training, regulating the workings of certified professionals in the various industries as per the code of conduct and professional ethics and so forth. The institute also promotes an environment of continuing education and professional development by bringing out research publications, monthly journals for the registered members. They also have program bulletins, tutorials for students who are appearing for the various level examinations. By interacting regularly with the government and other regulatory bodies, the institute helps its members stay updated about policy and professional changes.
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Thus, ICSI is an important institute and statutory body for the promotion and updation of the profession of Company Secretary Ship and is one of its kind in India.

Coclusion:
With the completion of e-EDP program, and after attaining all lectures of the faculties, we can say that the e-EDP program is a good tool for those students who want to save their time and want to attend the lectures without going for physical classes. The Institute of Company secretaries of India provides many skill development programs such as SIP, EDP , PDP and MSOP to enunciate the skill and be a Corporate leader. Company Secretary is the most coveted profession today in the corporate world. With the help of ICSI-GOLS it can be something easier to enter the Corporate World. The LVC of ICSI-GOLS is also appreciable and their faculties are highly qualifies and experienced.

Bibliography: Text book by ICSI Lectures of e-edp commence by ICSI-GOLS Books: Taxmann Publication, Sangeet kedia, Munish Bhandari and Dr. Avtar singh Journal : Student Company Secretary provided by ICSI Scanners: Shuchita publication Website: www.icsi.edu, www.eleraning.icsi.edu, www.wikipedia.org , www.cacscwa.in

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