SECRETARIAL PRACTICE

Unit-I

Company secretary - appointment – qualification for appointment as secretary – general legal position
- duties-rights - liabilities.

UNIT-II

Statutory and other books- period of preservation of records-return to be filed with te register- secretarial
duties regarding maintenance of statutory books & others books

UNIT-III

Depository and dematerialization : introduction - definition – advantages – procedure for

dematerialization of shares - transfer and transmission of share.

UNIT-IV

Role of company secretary in conducting the board meetings - frequency of board meeting - notice
for agenda – quorum - resolution by circulation - procedure at board meetings - minutes of the board
meetings

UNIT-V

Statutory meetings - procedure - secretarial duties relating to statutory meeting - annual general
meeting and extra ordinary general meeting - drafting of notices, agenda and minutes of a company
meetings.

TEXT BOOK :

1. secretarial practice – b.n.tandon , s.chand publishing pvt ltd , new delhi.

2. secretarial practice –p.saravanavel, himalaya publishing pvt , ltd , mumbai

REFERENCE BOOK :
1. secretarial practice - m.c.shukla & gulshan , s chand & co, new delhi

2. secretarial practice – sherlekar , himalaya publication pvt ltd , mumbai

 UNIT - I

COMPANY SECRETARY INTRODUCTION

The term "Secretary" is derived from the Latin word "Secretarius", which means a confidential
officer i.e. an officer to whom confidential matters can be entrusted. In those days, the term was solely
applied only to those officers who conducted correspondence of the king. It has also been said that the
man of action always need a man of the pen to record his deeds. But with the passage of time, the office of
the secretary assumed more importance.
In the modern times, the duties and functions have become so wide and varied that a modern
secretary does no longer resemble his ancient counterpart. He is even more indispensable to organizations,
such as charitable and educational institutions, sports clubs, religious bodies and professional associations.
Thus the secretary is almost an indispensable person in all walks of life
Secretary has to comply with the requirements of the Companies Act relating to the filing of
various Secretary begins with the flotation of the company and ends with its liquidation. Besides attending
to routine duties of office administration, writing letters, reports, proceedings and minutes of meetings, a
company 'returns' and 'statements' with the Registrar of Companies. Again, he has also to comply with the
provisions of Securities Contracts (Regulation) Act, Foreign Exchange Management Act, Income Tax Act
and other economic laws. He is the link between the directors and the shareholders, the medium through
which the company communicates with the outside world. 'While the directors are the brains of the
company, the secretary is its ears, eyes and hands.
The secretary is primarily concerned with the carrying out of the policy laid down by the
management; he may at times even help them in shaping that policy. The responsible nature of work of a
company secretary is further emphasized by the existence of a professional institution.

DEFINITION
Section 2(45),' as modified by the Companies (Amendment) Act, 1988, defines a company
secretary as follows: "Secretary means a person who is a member of the Institute of Company Secretaries
of India, and includes any other individual possessing the prescribed qualifications, and appointed to
perform the duties which may be performed by a Secretary under this Act and any other ministerial or
administrative duties.

APPOINTMENT OF A COMPANY SECRETARY:

Usually companies Articles empower their Board of Directors to appoint the secretary of the
company for such term., at such remuneration mid on such conditions as the Board thinks fit.' However,
the first secretary of a company is appointed by the 'promoters' at the per-incorporation stage. After the
company is registered this appointment should be confirmed at the first meeting of the Board of Directors
by a resolution which shall also fix the remuneration and allowances payable to the secretary. The said
resolution may be worded as follows:
 “RESOLVED: That Mr. C.D. of Mumbai be, and he is hereby, appointed secretary of the company
on a monthly salary of Rs .... Exclusive of allowances. The said appointment is subject to Month’s
notice of termination on either side."
The person acting as the ' pro term or the provisional secretary during the per-incorporation period
has no defence, if after incorporation he is not so employed. His position does not improve even if lie is so
named in the articles of the company, for, Articles of Association constitute a contract between the
company and its members only.
In addition to the Board of Directors resolution, an agreement of service between the company and
the appointed secretary is also executed. The agreement specifies the terms and conditions of service and
the nature and scope of the secretary's duties. A specimen form of agreement is printed below:

QUALIFICATIONS FOR APPOINTMENT AS SECRETARY:

Statutory Qualifications:
Under the companies (Appointment and qualification of secretary) rules, 1988 the qualifications
of a person to be eligible for appointment as a secretary are as follows:
1) Every company having a paid-up share capital of not less than Rs. 50 lakhs shall have a whole
time secretary [Rule 2(1)]
2) No person shall be appointed as whole-time secretary unless he is a member of the institute of
company secretaries of India constituted under the company secretaries Act, 1980 [Rule 2(2)].
3) A company having a paid-up share capital of less than Rs. 50 lakhs may appoint any individual as
its whole time secretary.
An individual is eligible to be so appointed if he possesses any of the following qualifications, namely.

i) Membership of the institute of company secretaries of India (ICSI)

ii) Pass in the intermediate examination conducted by the institute of company secretary of
India

iii) Post-graduate degree in commerce or corporate secretary ship granted by any university in
India.
iv) Degree in law granted by any university
v) Membership of the institute of chartered accountants of India (CA)
vi) Membership of the institute of cost and works Accountants of India; (ICWA)
vii) Post-graduate degree or diploma in management sciences, granted by any university, or the
institute of management, Ahmadabad, Calcutta, Bangalore or Lucknow.
viii) Post-graduate diploma in company secretary ship granted by the institute of commercial
practice under Delhi Administration.
QUALITIES OF COMPANY SECRETARY:

Besides the statutory qualifications laid down under the companies (Appointment and
Qualifications of Secretaries) Rules, 1988, a company secretary should also possess the following other
qualities.

1. General Education:
He should have sound general education of a fairly high standard and command of language.
2. Knowledge of Secretarial Work:

He should know the pre-meeting and post-meeting, procedure relating to issue of shares, calls on
shares, forfeiture and re-issue of shares must also be fully known to him.

3. Knowledge of Company Law:

Some of the most important duties of the secretary are those imposed by the companies act.
Therefore, that the secretary should know all about the latest provisions and guidelines issued under the
companies act, 1956.

4. Knowledge of Labour Laws:

The central and state governments have passed a number of laws aimed to securing labour welfare.
Being one of the top executives of an organization employing a number of persons. It is necessary that the
secretary is fully known with these laws.

5. Knowledge of Mercantile Laws:

The secretary must have intimate knowledge of the Indian Contract Act 1872. Sale of goods act
1930, Negotiable instrument Act 1881. Arbitration Act 1941 and of laws relating to stamp duty.
Trademarks and patents, sales-tax and income-tax, that the knowledge of these laws will help him in
advising the company officials at different levels.

6. Knowledge of Economic Laws:

The secretary must have sound knowledge of economic legislation like the industries
(Development and Regulation) Act 1951. The MRTP Act, 1969 the foreign exchange regulation act 1971
and other allied laws.

7. Knowledge of Banking and Finance:

The secretary must have a specialized knowledge of modern banking and finance. How to raise the
necessary finance for the organization at economical rates of interest? How are the share prices behaving
at the stock exchange? These are indeed complex questions. But a good secretary must be have simple
and ready answers to all these.

8. Knowledge of Book-Keeping and Accountancy:

 It is necessary that the secretary know all about how to keep the books of account. Not only this,
he should have knowledge of preparing the profit and loss account and balance sheet.

9. Knowledge of Book - Keeping and Accountancy:

He should be well-versed with the latest and best method of Filing, indexing office layout etc. and
how best to use the available men and machines in the office to their best possible capacities.

10. Knowledge of Language:

A reasonable proficiency in language is very important for a secretary. He must be able to speak
and write good English. This will help him in putting forward his point of view, whether at meetings or in
communications addressed to shareholders or to public in general.

11. A Winsome Personality:

Last, but not least, the secretary must be one who can make things move and deliver the goods.
What does one do to become such a person? One needs to have a number of qualities; First,

he must be a man of character

Secondly, he must have a sense of vision and capacity to look beyond

Thirdly, he must be a man with sufficient drive and tack. He can do so only when he has qualities
of leadership and sound organizational ability.

His personality, should be in the minds of and eyes of his associates and others in the higher
hierarchy, such that he may slowly but steadily prove his image and confidence in others who put him in
office.

GENERAL LEGAL POSITION OF THE SECRETARY

He must have the drive to make quick decisions and be in a position to secure the willing co- operation of
all who run the race of administration of the company along with him.
Being a liaison officer, he should have the sense of justice, self-control and sympathy in his
dealings with others with whom he might come into contact in the course of his administrative activities.
He should at once be--a quasi-lawyer, a quasi-economist and particularly he should seek to master
the intricacies of modern finance and its bearings upon the activities of his company.
His personality should be, in the minds and eyes of his associates and others in the higher
hierarchy, such that he may slowly but steadily improve his image and instill confidence in others who put
him in office.
The legal position of the secretary is not capable of precise description. The Companies Act does
not specifically mention about his legal position. However, his legal position can be well understood fro m
the observations made by Lord Ashore, in the course of his judgment in Burnt Hoers & Co. V. The
South London Tram ways Co. Ltd., which runs as follows:
GENERAL LEGAL POSITION FOR COMPANY SECRETARY:

The legal position of a company secretary may be explained as follows:

a) As a servant of the company:
The secretary of a company is a servant of the company, whose duty is to act in accordance with
instructions given to him by the directors. In the performance of his duties, therefore, the secretary can
properly act only under the orders of the directors. In the words of Lord Esher M.R., "A secretary is a
mere servant; his position is that he is to do what he is told, and no person can assume that he has any
authority to represent anything at all" (Barnett vs. South London Tramway's Co.').
The secretary cannot, for instance, summon a general meeting on his own authority (Re State of
Wyoming Syndicate'); or register a transfer of shares unless instructed to do so by the directors (Chida
Mines Ltd. vs. Anderson'); or borrow money for the purposes of the company without the like authority
(Re Cleadon Trust Ltd.').
Further, he has no implied authority to bind the company by making any representation, except the
representation implied by Section 112 upon a certification of transfer made in accordance with that
Section.

(b) As an agent of the company.

The secretary of a company, being the Chief Administrative Officer of the company by virtue of his
office, is also an agent of the company in a restricted sense.
He has ostensible authority to enter into contracts on behalf of the company as regards matters connected
with office administration, e.g., employment of office staff, the ordering of a.-Tice equipment, the hiring of
vehicles [Panorama Development (Guildford) Ltd. vs. Fidelis Furnishing Fabrics Ltd.']. As agent, he must
conduct the business with reasonable care and diligence and shall be made liable to account for any secret
profits made by him in the course of his employment (Mckay's" case).
A company is liable in respect of all such acts of its secretary as are done by him within the scope
of his authority, and it is immaterial whether the secretary was acting in his own interests, or in the
interests or supposed interests of the company [Lloyd vs. Grace, Smith & Co. (1912)]. It may be noted that
a secretary is not an agent of the company like the directors. He is an agent in the capacity of a servant and
cannot act for the company without authority from the directors except as regards matters covered within
his administrative function.

(c) As an officer of the company:

The secretary is also an officer of the company within the meaning of Section 2(30). Again, in all
penal provisions of the Act, the person sought to be made liable is described as 'officer who is in default'.
The expression 'officer in default' includes the secretary as well (Sec. 5). As "officer" of the
company he may incur liability to statutory penalties by reason of non-compliance with the requirements
of the Act, for instance, he may be held liable for default in holding the statutory meeting and filing the
statutory report under Section 165, for default in registering certain resolutions and agreements as required
under Section 192.
 The secretary, like any other officer of the company, will be punishable with .imprisonment, if he
falsifies the books of the company, or if he willfully and knowingly makes a material false statement in the
Balance Sheet or in certain returns, reports, certificates or other documents of a company which is being
wound up (Secs. 539 to 541). Again, misfeasance proceedings may also be taken up against him in a
winding up if he has. Misapplied any money or property of the company or has been guilty of breach of
trust (Sec. 543).
Besides, a secretary is the chief officer under whose supervision all the ministerial and
administrative work at the registered office of the company i, carried on. He is solely responsible to the
managing director or manager and the directors for the smooth running of office work.
In actual practice what usually happens is that any paper or problem which cannot be dealt with by
a particular department in the company is referred to the company secretary for disposal. Thus, he in effect
plays the role of a utility man and becomes a handy trouble shooter. In fact, the secretary is the real
principal officer of a company who is the proper person to correspond on behalf of the company in all
routine matters.
To substantiate, it may be stated that under the Civil Procedure Code, no evidence of competency is
required for the secretary to sign pleadings on behalf of the company in connection with civil suits.
Professor Gower" has summed up the position of the company secretary as follows:
"It is arguable, therefore, that the secretary has also graduated as an organ of the company. Though
appointed by .the directors he is not their servant but an officer of the company with substantial authority
in the administration sphere and with powers and duties derived directly from the articles and the
Companies Act. And in the performance of his statutory duties he is clearly entitled to resist interference
from the members, Board of Directors or managing director. Where he differs from them is that he has no
responsibility for corporate policy or for making managerial decisions, as opposed to playing an
administrative role in ensuring that the policy and managerial decisions are implemented."
In order to provide strict control over the issue of share certificates by the companies, the Central
Government have made rules entitled ‘The companies (Issue of Share Certificates) Rules, 1960'. These
rules, as amended up-to-date, must be followed notwithstanding anything to the contrary contained in the
Articles of Association of a company.

DUTIES OF THE SECRETARY

The duties of the secretary can be broadly classified into two kinds viz.,
i. Statutory Duties, and
ii. General Duties.
I. Statutory Duties of the Secretary
The statutory duties of the secretary arise out of his position as mentioned in different statutes such
as Companies Act, Income Tax Act, Stamp Act etc. If the secretary fails to attend to those matters. He
shall be considered as an "officer in default" and should face the consequences. The following are the
important statutory duties of the secretary.
1. Under the Companies Act
1) Signing any document or proceedings requiring authentication by the company [Sec. 541].
2) Delivering for registration return of allotment [Sec. 75].
 3) To give notice of the increase in the share capital to the Registrar [Sec. 97].
4) Delivering the share certificate within 3 months of allotment or within 2 months of registration of
transfer [Sec. 113].
5) Making entries in the register of members on issue of share warrants [Sec. 115].
6) Making available trust deed for inspection to every member or debenture holder and to forward a
copy of it to the members or debenture holders on their request within 7 days of request on
payment of prescribed fee [Sec. 118].
7) Delivering for registration particulars of mortgages and charges to the Registrar [Secs. 125 to 127].
8) Getting painted or affixed the name or a name plate of the company outside every office or the
place of its business, getting it printed on documents of the company and engraved on the seal of
the company [Sec. 147].
9) Making a statutory declaration for attaining the certificate of commencement of business [Sec.
149].
10) Signing the Annual Return [Sec. 161].
11) Allowing inspection and to furnish copies of register of members [Sec. 1631.
12) Sending notices of general meetings to every member of the company [Sec. 171].
13) 'Filing resolutions and agreements requiring registration with the Registrar [Sec. 192].
14) Preparing minutes of every general meeting and of every meeting of Board of directors or of
every Committee of the Board within 30 days of the conclusion of every such meeting.
15) Making available for inspection the minute books of general meetings [Sec. 196].
16) Signing the Annual Return of the company [Sec. 215]..
17) Sending notices of the meetings [Sec. 286].
18) Making available Report of Directors for inspection [Sec. 304].
19) Assisting in preparing the statement of affairs in a winding tip for the purpose of submitting it to
the liquidator [Sec. 454].
20) Maintaining the following statutory books:
(a) Register of investment held by company in the name of its nominee [Sec. 491.
(b) Register of charges [Sec. 143].
(c) Register of members [Sec. 150].
(d) Register and Index of debenture holders [Sec. 1521.
(e) Register of contracts in which directors are interested [Sec. 3011.
(f) Register of directors, manager & secretary [Sec. 3031.
(g) Register of directors' shareholdings [Sec. 3071.

2. Duties under other Acts -

1. Under the Income tax Act: A company secretary is a "Principal Officer" of a company under
Sec. 2(35) of the Income-tax Act, 1961. The Act imposes certain obligations upon him:

a. To ensure that proper income tax is deducted at source from the salaries paid to the employees, or
from dividend or interest paid/ payable to shareholders and debenture holders respectively.

b. To see that a certificate of income tax deducted at source is furnished to every shareholder and
 debenture holder.

c. To ensure that the tax so deducted has been deposited in Government treasury.

d. To submit and verify miscellaneous statements, forms and returns.

2. Under the Indian Stamp Act: It is the duty of the secretary to see that the documents like letters of
allotment, share certificates, share warrants, debenture certificates and transfer forms etc. are properly
stamped as per the requirements of the Indian Stamp Act.

3. Under Other Acts: In addition to the above, the secretary is also required to perform the various duties
specified in The Industrial Disputes Act, 1947, The Employees State Insurance Act, 1948, The Minimum
Wages Act, 1948, The Payment of Wages Act, 1936, The Factories Act, 1948, The Provident Fund Act,
1952, Foreign Exchange Management Act (FEMA), 1999 and Monopolies and Restrictive Trade Practices
(MRTP) Act, 1969.

II. General Duties of the Secretary

Besides the statutory duties mentioned above, the secretary of a company has several general
duties. These duties can be classified into five major groups. They are as follows:

1. Duties to the Directors

The secretary is under the full control of the Board of directors. He is to carry out the instructions of the
directors and can exercise only those powers, which are delegated by the Board to him. However, in
relation to the directors, he has to perform the following duties in general.
1. To deal with all correspondence in which the directors themselves are interested.
2. To issue notice and agenda for the Board and general meetings, attend such meetings, keep
notes of proceedings, and maintain separate minutes for these meetings.
3. To act as a liaison between the Board and the shareholders, staff etc.
4. To ensure submission of Statutory Returns in time.
5. To keep calendars of due dates or checklist of meetings so that returns etc. can be filed on the
due dates.

2. Duties to the Shareholders

The secretary is the connecting link between the directors and shareholders. In relation to the
shareholders, the secretary owes the following duties.
1) To do all necessary things connected with the issue of shares such as issue of prospectus, share
application forms, allotment, issue of share certificates etc.
2) To maintain several non-statutory books such as Share Transfer Book etc.
3) To arrange for funds and pay interest on loans received.
4) To arrange for funds and issue dividend warrants within the specified time.
5) To issue notices and agenda for the general meetings, class meetings and to attend correspondence
received from them.
6) To attend and maintain minutes books of such meetings.
 3. Duties to the Organization and Staff
The secretary is the executive head of the office. In other words, he should execute the policies of
the Board of directors. Therefore, all the heads of the departments should be in touch with the secretary
and it is only through the secretary that the orders of the higher management are conveyed to them.
The secretary, therefore, should communicate the instructions of the Board from time to time and
to co-ordinate the activities of all the departments for the proper execution of the policies. Sometimes, he
may also be asked to assist personal department in recruiting and training the office staff.

4. Duties to the Outsiders

The secretary is fully aware of the policies of the management. Therefore, he is the gateway of
the Board for communication with the general public. The general public, in this context, means and
consists of the company's creditors, bankers, solicitors, debenture holders and the prospective investors. He
has to be in constant touch with them. At the same time, he should be very careful and cautious in
supplying information to them. He should always be careful that no confidential or secret information
or trade secrets are leaked out. Besides, the secretary himself should not make use of such
information for his personal benefits.

RIGHTS OF SECRETARY

The rights of a company secretary mostly flow out of his service agreement with the company. These
may be summarized as follows:
1. Right to supervise the secretarial department. Being head of the secretarial department, he has the
right to control and supervise the activities of the department under his control
2. Right to sign documents. As a principal officer within the meaning of the Companies Act, he has
to sign documents requiring authentication of the company
3. Right to claim remuneration. The secretary is a servant (employee) of the company and has a
right to claim his salary during its lifetime. Before his services are terminated, he can demand a
reasonable notice and claim damages for his wrongful dismissal. In the event of the winding up of
the company he can claim his outstanding salary as a preferential creditor
But the secretary has no right to:

1. Make allotment, or register transfer, of shares of the company unless he is specifically authorized
by the directors in that behalf and the Articles of the company allow the directors to delegate this
power to the secretary
2. Make any representation on behalf of the company or to enter into any contracts without express
authority and consent of the directors;
Borrow in the name of the company
KINDS OF SECRETARY
The importance of the secretary can be well understood by studying the nature and functions of the
various kinds of secretary. The following are the principal kinds of secretary:
1. Ministry's or Department's Secretary: In our country. every Government Department has a
secretary and he acts as the executive head of the department. For example, Secretary to the
Finance Department.
Decisions that are taken by the Government Ministry are to be implemented by the secretary
only. Further, he advises the ministers in certain matters. He is a permanent Government servant.
The important functions performed by him include administrative function, advisory functions,
formulation of policies etc.
2. Private Secretary: Private secretary or personal secretary is generally appointed by a person in
high positions such as Ministers, Chief Executives and senior persons in professions like legal,
medical etc.. He keeps the confidence of his master and relieves him from many routine duties. He
is the right hand man of his employer.
3. Secretary of an Embassy: This is an official of an embassy or a diplomatic mission ranking next
to the Ambassador or Envoy. The office of the Secretary of an embassy is highly responsible and
confidential in nature.
He is also empowered to act for the Ambassador in his absence. He also performs
administrative and executive functions. But basically, he is his country's representative in the
country to which he is posted and acts as a link between his embassy and the Government of the
country in which it is located. As a, public relations man, he is required to project his country's
image truly and faithfully.
4. Secretary of a Trade Union: Every trade union has a secretary. The functions and duties of the
secretary of a trade union vary with the size and type of the union. However, his duties are partly

administrative, partly advisory and partly negotiatory.

5. Secretary of a Local Body: The statutes relating to the formation and working of local bodies like
Municipal Corporations. Municipal Councils, District Boards etc. recognize secretary as one of the
most important officers of the local body.
They usually provide for the appointment of a whole time secretary to look after their day-
to-day affairs. The secretarial duties include office management, assisting in the conduct of
meetings, recording proceedings at the meetings of the body concerned, ensuring that the legal
requirements are duly complied with and doing scores of other functions.
6. Secretary of a Co-operative Society: The Chairman of the co-operative society is considered as
the chief executive and the secretary manages the day-to-day administration of the society subject
to the control of the Board of Directors. He is required to maintain proper records and registers in
accordance with the rules framed by the Government and submit periodical statements and returns
to the Registrar of co-operative societies.
The secretary of a co-operative society is an officer of the society. He may be appointed
either as a paid secretary or elected from among the members of the managing committee. A
secretary may be appointed on part time or full time basis depending on the size or volume of work
of the society.
7. Secretary of an Association: Secretaries of cultural associations, sports clubs, professional and
 business associations and similar bodies come under this category. The secretary of an association
is generally elected from the members of the Managing Committee.
Some associations appoint a whole time paid secretary to conduct the day-to-day
administration. His duties are both executive and ministerial. He acts as the agent and advisor of
the managing committee.
8. Secretary of a Company: The secretary of a company is the Chief Administrative Officer of the
company and plays an important part in the secretarial business of a joint stock company. His
qualifications. duties and liabilities etc. shall be discussed subsequently.

Rights of company secretary:

The rights of a company secretary mostly flow out of his service agreement with the company.
These may be summarized as follows:

1) Right to supervise the secretarial department:

Being head of the secretarial department, he has the right to control and supervise the activities of
the department and his control.

2) Right to Sign Documents:

As a principal officer within the meaning of the companies act, he has a right to sign documents
requiring for the company.

3) Right to Claim Remuneration:

The secretary is a servant (employee) of the company and has a right to claim his salary during its
lifetime. Before his services are terminated, he can demand a reasonable notice and claim damages for his
wrongful dismissal.

But the Secretary has no right to,

1) Make allotment or register transfer of shares of the company unless he is specifically authorized by
the directors in that behalf and the Articles of the company allow the directors to delegate this
power to the secretary.
2) Make any representation on behalf of the company
3) Borrow in the name of the company
LIABILITIES OF THE SECRETARY
The Companies Act imposes certain liabilities on the secretary both expressly and by implication.
Besides, he has also certain contractual liabilities arising out of his contract of employment. Therefore, the
liabilities of the secretary can be discussed under two headings viz.,
I .Statutory Liabilities, and
II. Contractual Liabilities.
1. Statutory Liabilities
The Company Act lays down several instances in which the secretary be held liable. The Act
specifies specific liabilities for his failure to perform the duties entrusted to him by the Act. These
liabilities are both and criminal. He can also be fined in a Court of Law. However, the* secretary cannot
be held liable for his acts,. if it is proved that he has acted with due care and skill.
Some of the important sections and the penalty which are levied for default or non-compliance
which affect the day-to-day functions of the secretary in a company are:
1. Default in filing a return of allotment fine up to Rs.5, 000 for every day during which the default
continues [Sec. 75].
2. Default in keeping ready for delivery share certificates, debenture certificates etc. within 3 months
after allotment and within 2 months of the application for registration of transfer fine up to Rs.5,
000 for every day during which the default continues [Sec. 113].
3. Default in filing particulars of charges on properties acquired subject to charge fine up to Rs.5, 000
[Sec. 127].
4. Failure to comply with the requirements of Sec. 147 of the Act regarding exhibiting the name of
the company fine up to Rs.500 per day of default.
5. Default in filing Annual Return fine up to Rs.500 for every day during which the default continues
[Sec. 162].
Default in holding statutory meeting or filing the statutory report with the Registrar fine up to Rs.5,
000 [Sec. 165].
6. Default in holding the annual general meeting of the company fine up to Rs. 50, 000 plus fine up
to Rs. 250 for every day after the first day during which such default continues [Sec. 168].
7. Default in the circulation of the members' resolution fine up to Rs.50, 000 [Sec. 188].
8. Default in registering certain resolutions and agreements requiring registration fine up to Rs.200
per day of default [Sec. 192].
9. Failure to record the minutes of the Board and General Meetings fine up to Rs.500 [Sec. 193].
10. Refusal in allowing inspection of minutes of general meeting or failure to furnish a copy of such
minutes on request by any member within 7 days of such request fine up to
Rs.5, 000 in respect of each offence [Sec. 196].
11. Default in laying down profit and loss account and Balance Sheet at the annual general meeting
fine- up to Rs. 10, 000 or imprisonment up to 6 months or both [Sec. 210].
12. Failure to give the due notice of Board meeting fine up to Rs. 1, 000 [Sec. 286].
13. Failure to maintain the following statutory books:
(a) Register of member’s fine up to Rs.500 per day of default [Sec. 150].
(b) Index of register of member’s fine up to Rs.500 [Sec. 151].
(c) Register and index of debenture holders fine up to Rs.500 [Sec. 152].
 (d) Register of directors' shareholdings fine up to Rs.5, 000 [Sec. 307].
(e) Register of director’s fine up to Rs.500 per day of default [Sec. 303].
(f) Register of inter corporate loans fine up to Rs.500 plus further fine up to Rs.50 per day of
default [Sec. 370].
(g) Register of inter corporate investments fine up to Rs.5, 000 plus further fine up to Rs.500
per day of default [Sec. 372].
Sec. 628 provides that if in any return, report, certificate, Balance Sheet, prospectus, statement or
other document required by or for the purposes of any of the provisions of the Act, any person (including
an officer) makes a statement.
1. which is false in any material particular, knowing it to be false, or
1. Which omit any material fact knowing it to be material, he shall save as otherwise expressly provided
in the Act, be punishable with imprisonment up to two years and shall also be liable to fine.
Sec.629 provides for imprisonment up to seven years and a fine for giving false evidence.
Sec. 629A prescribes penalty for any person contravening the provisions of the Act for which no
specific penalty is provided elsewhere in the Act. Under this section, a company and every officer thereof
in default shall be punishable with fine up to Rs.5, 000 and where the contravention is a continuing one,
with a further fine up to Rs.500 for every day after the first day during which the contravention continues.
Sec. 630 prescribes penalty for obtaining wrongful possession of any property of company or
wrongful withholding or application of such property for purposes other than those given in the articles or
under the Act. The penalty provided is refund of the property, fine or imprisonment as thought fit by the
Court trying the offence under this section.
But Sec. 633 of the Act gives relief inter alia to a secretary of any liability incurred under the
Companies Act. The section provides relief in cases of undue hardship in deserving cases and gives relief
from liability to persons who, though technically guilty of negligence, default, breach of duty, misfeasance
or breach of trust, are able to convince the conscience of the Court that they have acted honestly and
reasonably and having 'regard to the circumstances of their case, they ought fairly to be excused from the
charge or charges made against them.
However, in a criminal proceeding under this section the Court does not have any power to grant
relief from any civil liability, which may attach to an officer in respect of these offences.

II. Contractual Liabilities

Apart from the statutory liabilities, the secretary of a company has certain liabilities to the
company arising out of the contract of service between him and the company.
The following are some of the important contractual liabilities of the secretary.
1. No Secret Profit:
The secretary is in a fiduciary relationship with the company. As such, he should not make any secret
profit and should account for any such profit he makes.
2. Disclosure of Secrets:
He should not disclose any confidential information and trade secrets. However, he can do so only if
such a disclosure is essential to discharge his duties properly.
3. Proper Discharge of Duties:
He is responsible to the directors for the proper discharge of the duties of his office. He must carry out
the orders given to him.
4. Willful Misconduct and Negligence:
He is responsible for damages caused to the company by his willful misconduct and negligence in
the discharge of his duties. However, he cannot be held liable if he discharges his duties with due care and
diligence.
5. Scope of Authority:
The secretary should not do any thing beyond the limits of his authority or in violation of the rules and
regulations of the company. If he exceeds his limit, he shall be held personally liable for the loss suffered
on account of his action.
6. No clash of Personal Interest:
He should not allow his personal interest to clash with the interest of the company.
 ESTION BANK

UNIT I (1 MARKS)

1. The Institute of Company Secretaries of India is set up under

a. Companies Act, 1956
b. Act of Parliament
c. Companies Act, 2013
d. Act of State Legislature
2. The profession of Company Secretaries is governed by
a. Institute of Chartered Accountants of India
b. Institute of Company Secretaries of India
c. Institute of Cost and Management
Accountants of India
d. Bar Council of India
3. The develops and regulates the profession of Company Secretaries in India.
a. Institute of Chartered Accountants of India
b. institute of Company Secretaries of India
c. Institute of Cost and Management
Accountants of India
d. Bar Council of India

4. Institute of Company Secretaries of India functions under the jurisdiction of

a. Ministry of Finance, Government of India
b. Ministry of Home Affairs, Government of India
c. Ministry of Corporate Affairs, Government of India
d. None of the above
5. Institute of Company Secretaries of India has its headquarters at
a.New Delhi
b.Chennai
c. Mumbai
d. Kolkata
6.The ICSI is a premier national professional body established under
(a)Act of Parliament
(b)Act of Central Government
(c)Companies Act, 2013
(d)Both (a) and (b)
7. Company Secretary is not the Key Managerial Personnel of the Company.
(a)False
(b)True
(c)Partly
True (d)Can’t
Say
8. The ICSI functions under the administrative jurisdiction
of(a)Ministry of State Affair
(b)Central Government
(c)Ministry of Corporate
Affair (d)Both (b) and (c)
9. The role of Company Secretary is :
(a)Arbitrator
(b)Lawyer
(c)Both (a) and
(b) (d)Can’t say
10.”Speak the truth and abide by law” is the of the Institute of Company Secretaries of
India.
a. Vision
b. Motto
c. Mission
d. None of the above
11.The word integrity is derived from Latin word
a. Integer
b. Integra
c. lntragur
d. Integrem
12.Integrity means
a.Honesty
b.Completed
c.Sincere
d.All of the above
13.Ethics is derived from Greek word
a. Ethia
b. Ethiu
c. Ethos
d. Ethamia.
14.Whatever is conscientiously right is
a. Integrity
b. Ethics
c. Honesty

d. Ownership
15. means possessing a sense of right and wrong
a. Integrity
b. Ownership

c. Ethics
d.
Reliability
ANSWERS
1B 2B 3B 4C 5A 6A
7A 8C 9A 10 B 11 A 12 A
13 C 14 B 15 C
 PART – B (5 MARKS)

1. Explain about the appointment of a company secretary.

2. Write down the statutory duties of a company secretary.

3. Write down the general duties of a company secretary.

PART – C (10 MARKS)

1. Explain the kinds of company secretary.

2. Explain the liabilities of a company secretary.

 I. UNIT ABSTRACT
Name of the Paper : Secretarial Practice Class: III B.COM (CA)

Important
Keywords Definition
Question with
marks

A liability that one party assumes 1. Explain about the appointment of a

Contractual Liabilities while it signs a contract with another company secretary
party 2.Write down the general duties of a company
secretary

Statutory liability occurs when a

1. Explain the kinds of company secretary
party can be held responsible for a
2.Explain the qualification of appointment of
Statutory Iiabilities certain occurrence due to the terms
secretary
of a specific law or statute
3.Write down the rights of a secretary

Signature of the Subject Incharge Head of the Department/Vice Principal

 UNIT -II

STATUTORY BOOKS FOR A COMPANY

Statutory Books are a set of legal documents that every company must maintain as part of its compliance with

corporate laws and regulations. These books serve as official records of the company's activities and are required

to be kept up-to-date and accurate.

IMPORTANCE OF STATUTORY BOOKS:

Statutory Books serve as an official record of the company's activities and are crucial for legal
compliance. They provide transparency and accountability in the company's operations and help to establish the
company's credibility with stakeholders. Here are some of the key reasons why statutory books are important
for a company:
1. Compliance: Maintaining statutory books is a legal requirement for all companies. Failure to maintain
accurate and up-to-date books can result in penalties and legal action.
2. Transparency: Statutory books provide transparency in the company's operations and help stakeholders to
understand the company's financial and management structure.
3. Decision-making: Statutory books contain important information that can be used by the board of directors
and other stakeholders to make informed decisions about the company's future.
4. Due Diligence: Statutory books are often reviewed during due diligence by potential investors, buyers, or
partners. Accurate and up-to-date books can help to establish the credibility of the company and increase its
value.

PERIOD OF PRESERVATION OF RECORDS UNDER COMPANIES ACT 2013

period of preservation of records under Companies Act 2013 of this Policy contains the details of documents
with preservation period of not less than eight years after completion of the relevant transactions. All modifications,
amendments, additions, deletions to the said documents shall also be preserved for a term not less than eight years.

22
RETURN TO BE FILED WITH THE REGISTRAD
All companies registered in India must prepare and file with the Registrar of Companies, an annual return in
FORM MGT 7, within 60 days from the date of annual general meeting.

SECRETARY DUTIES

 Answering calls, taking messages and handling correspondence

 Maintaining diaries and arranging appointments

 Typing, preparing and collating reports

 Filing

 Organising and servicing meetings (producing agendas and taking minutes)

 Managing databases

 Prioritising workloads

 Implementing new procedures and administrative systems

 Liaising with relevant organisations and clients

 Coordinating mail-shots and similar publicity tasks

 Logging or processing bills or expenses

 Acting as a receptionist and/or meeting and greeting clients

 If more senior, recruiting, training and supervising junior staff.

MAINTAINED STATUTORY BOOKS

According to the Companies Act, a company has to maintain several types of Books and Registers.

Books are often classified as Statutory Books and Statistical Books. Statistical Books refer to Books of Account

and such other Record Books like an Inventory. Statutory Books are those which are necessary to observe legal

formalities of a company including Registers.

Generally the Statutory Books (including Registers) are:

(1) Register of Members.

(2) Index of Members.

23
 (3) Register of Directors.

(4) Register of Debenture-holders.

(5) Register of Mortgages and Charges.

(6) Register of Directors’ Shareholdings.

(7) Register of Contracts in which Directors is interested.

(8) Minute Books:

(a) Of Directors’ Meetings;

(b) Of Members’ Meetings;

(c) Of Different Committees’ Meetings, etc.,

(9) A File of Annual Returns.

(10) Register of Fixed Deposits.

(11) Register of Company’s Investments in companies in the same group, etc. Besides these, there shall

be sets of Books of Account.

There are some other books which are maintained by big companies:

(a) Application and Allotment Book,

(b) Register of Transfers,

(c) Seal Book,

(d) Directors’ Attendance Book,

(e) Call Book,

(f) Agenda Book,

(g) Share Certificate Book,

(h) Dividend Book,

(i) Register of Share Warrants,

(j) Log Book, etc. Such Books are also known as Optional Books.
24
QUESTION BANK
1. Which of the following is not a part of the organising process?
a) Assignment of responsibilities
b) Establishing reporting relationship
c) Specialisation
d) Division of work
Answer: C

2. Organising doesn’t include .

a) By whom will be done
b) When will be done
c) What will be done
d) How will be done
Answer: D
3. Who reports to whom is made clear by .
a) Organising process
b) Management process
c) Planning process
d) None of the above
Answer: A
4. Grouping the activities on the basis of the product line is a part of .
a) Formal organisation
b) Divisional structure
c) Informal organisation
d) Functional Structure
Answer: B
5. The form of organisation known for giving rise to rumours is called .
a) Decentralised organisation
25
b) Formal organisation
c) Centralised organisation
d) Informal organisation
Answer: D
6. Name the type of organisation that is deliberately designed by top management to achieve
a common organisational objective.
a) Corporate organisation
b) Divisional organisation
c) Formal organisation
d) Informal organisation
Answer: C

7. Delegation is .
a) Optional
b) Compulsory
c) None of the options are correct
d) Both a) and b)
Answer: B
8. Decision-making authority can be pushed down to a lower level and this is related to .
a) Centralisation
b) Delegation
c) Decentralisation
d) None of the options are correct
Answer: C
9. Decentralisation is .
a) Optional
b) Compulsory
c) Both a) and b)
d) None of the options are correct
Answer: A
10. For fast communication and to get correct feedback, the following organisation is suitable for
.
a) Functional Structure

26
b) Informal Organisation
c) Divisional Structure
d) Formal Organisation
Answer: B
11. The functions to be performed in an office can be categorised as
(a) primary functions

(b) secondary functions

(c) management tunctions

(d) Both ‘a’ and ‘c

Ans. d

12. Which among the following is/are primary functions of office?

(a) It receives intormation from various departments of the organisation or from outside

(b) It is required to convert the information received into other forms, so that it can be easily understood by
the managenent

(c) Both ‘a’ and ‘b’

(d) None of the above

Ans. c

13. Which among the following is/are management functions of an office?

(a) It is required to colect, process, categorise, arrange and present information for analysis and
reference

(b) For smooth flow of work, development of office system and procedures is essential

(c) Both ‘a’ andb

(d) None of the above

Ans. b

14. …… is understood to be a place where clerical work is done and all kinds of paper work is
maintained and dealt with.
(a) Office

(c) Reception

27
(b) Factory

(d) None of the above

Ans. a

15. To protect and safeguard the assets against destruction, damage, loss, etc., is a . function of an office.
(a) primary

(b) secondary

(c) managerment

(d) None of the above

Ans. c

PART – B (5 MARKS)

1. Explain about the importance of statutory books.(Nov 2017)

2. Write about period of preservation of records under companies act 2013.(Nov 2017)

PART – C (10 MARKS)

1. Explain about the maintenance of records.(April 2016)

2. Explain about the secretary duties.

28
 UNIT –II ABSTRACT

Name of the Paper : Secretarial Practice Class: III B.COM CA

Important
Keywords Definition
Question with
marks

Secretary is the principal of a 1.Explain about the types of an organization

company as well as the servant of the 2.Write about communication and
Secretary Board of Directors and shareholders correspondence.
of the firm. He has to face and to deal 3. Explain about the types of organization
with the request of shareholders charts.

1. Explain about the maintenance of records.

A committee is a group of people 2. Explain about the management of company
who meet to discuss or make a
staff
Committee decision on a particular subject.
Organization Committees are found in different 3. Explain the communication process in an
levels of organization organization.

Signature of the Subject Incharge Head of the Department/Vice Principal

29
 UNIT -III.

Meaning od Depository

The word 'depositary' is defined as “the party of the institution (eg bank or trust company)
receiving a deposit It acts as a trustee of the owner since the securities are entrusted with him in trust. He
is also the agent
of the owner of the securities

Definition of depository:

Person or firm entrusted with safekeeping of funds, securities, or other valuable assets.

Dematerialization

Dematerialization is the process by which physical share certificates of an investor are taken back
by the company/registrar and destroyed. Then an equivalent number of securities in the electronic form are
credited to the investors account with his Depository Participant.

Dematerialization is done at the request of the investor. Investors will first have to open an account
with a DP (Depository Participant) and then request for dematerialization of certificates through the DP.

Purchases made by an investor are credited to his account and sales are debited. The securities held
in dematerialized form are fungible. In other words they do not have any distinguishing features.
Dematerialized shares do not have any distinctive numbers. All the holdings of a particular security will
be identical and interchangeable.
.
PROCESS OF DEMATERIALIZATION

The following are the steps involved in the process of dematerialization:

1. The investor is required to fill up the Demat Request Form (DRF) available with the DP and
submit it along with the physical certificates which need to be dematerialized. Odd lot shares can also be
dematerialized.

2. Depository participant (DP) intimates the Depository of the request from his approved user hardware
system.

3. Depository participant submits the certificates to the Registrar.

4. Registrar confirms the dematerialization request from depository.

5. After dematerializing certificates, Registrar updates the accounts and informs depository of
the completion of dematerialization.

30
 6. Depository updates its accounts and informs the depository participant.

7. Depository participant updates the account and informs the investor.

Advantages of Demat Account

In the Depository System, the ownership and transfer of Securities takes place by means of
electronic book entries. Demat account holders can buy and hold Shares, NCDs or other debt securities.
They can access the account just like a bank account with the following advantages and safety features :

 No Stamp duty on transfer of securities.

 Immediate and fast transfer of securities.
 Elimination of 'Bad Deliveries'.
 Elimination of risk by loss, theft, mutilation etc.
 Faster settlement and disbursement of Corporate benefits like Bonus, Rights, Dividends etc.
 Elimination of mismatch in Bank Accounts and Address.
 Convenient Nomination facilities.
 Convenient Transmission formalities in case of death of a holder.
 No TDS deduction for demat securities.
 Demat account information and statement regularly sent to the customer.

PROCEDURE FOR PURCHASE OF DEMATERIALIZED SECURITIES

The transactions relating to purchase of securities are:

1The investor purchases securities through a broker.

2The broker receives credit of securities in his clearing account (clearing member pool account)
on the pay-out day.

3.Broker gives instructions to its DP to debit clearing account and credits the investor’s account.

4The investor receives shares into his account. If standing instructions are not given at the time of
opening the account, the investor has to give ‘Receipt Instructions‘ to the DP for receiving credit.

5.The investor has to ensure that the broker transfers the securities from his clearing account to the
investor’s depository account before book closure. If the securities remain in the clearing account
of the broker. the company would give corporate benefits (dividend or bonus) to the broker. In that
case, the investor will have to collect the corporate benefits from the broker.

31
PROCEDURE FOR SALE OF DEMATERIALIZED SECURITIES

1. The investor sells the securities in any of the stock exchanges linked to the National Securities
Depository Limited (NSDL) through a broker.

2. He has to instruct his Depository Participant (DP) to debit his account with the number of
securities sold and credit broker’s clearing account.

3. The delivery instruction has to be given by the investor to his DP using the delivery instruction
slips, received by him at the time of opening the demat account from the DP.

4. Before the pay-in day, the investors’ broker gives instructions to its DP for delivery to clearing
corporation.

5. The investor receives payment from the broker for the sale of securities.

Transfer of Shares

Transfer of shares refers to the transfer of title toshares, voluntarily, by one party to another.
Transmission of shares means the transfer of title toshares by the operation of law. Affected by. Deliberate
act of parties. Insolvency, death, inheritance or lunacy of the member

Steps for Transfer of Shares

The following are the steps for transfer of shares:

1) On receipt of the transfer instrument, duly executed, in the prescribed form along with the share
certificate or allotment letter, it is usual for companies to give an acknowledgment for the same.
2) The instrument is to be checked thoroughly to find out whether the same is in order.
3) Where the instrument of transfer is received from a person other than the transferor and the
shares are partly paid-up, the company has to send a notice to the transferee.
4) It is also advisable to send notice to the transferor, as a measure of causation.
5) Before effecting any transfer, the company should ensure that the instrument is lodged within
the time limit as prescribed in Sec. 108(IA) of the Companies Act.
6) Where the shares are intended to be transferred to a body corporate, it should be ascertained as to
whether –
a. the Memorandum and Articles of Association empower the transferee company to make
the investment,
b. the Board of directors of the intended transferee body corporate has passed the necessary
resolution and has empowered the person concerned to deal with the matter inthis behalf,
c. the person executing the deed on behalf of the body corporate has valid authority to do so,
and
d. If the provisions of Sec. 108A to 108 I are attracted, whether the necessary formalities
32
 there under have been complied with.
7) Where the intended transferee is a trust or a partnership firm or other association of persons, it
should be ensured whether
a) The trust is registered under the Societies Registration Act or not. If it is registered, as aforesaid,
the trust becomes a body corporate and shares can be registered in the name of the trust.
Otherwise, shares have to be registered in one or more names of the trustees of the trust,
authorized by resolution of the Board of Trustees by whatever name called.
b) If the shares are purchased by a partnership firm or an association of persons, the shares are to be
registered in the individual name(s) of one or more partners, in the case of partnership firms; or
in the name or names of any of the office bearers of the association, in case of association of
persons. Similarly, in case the shares are purchased by a Hindu Undivided Family, shares have
to be registered in the name of the Karta, without mentioning the representative character.
8) Where the transferee is minor, transfer of shares is to be effected in accordance with the provisions
of the Articles of Association of the company. Where shares to be transferred are fully paid-up,
there is no problem for companies to register the same in favour of minors through guardian.
9) After making thorough scrutiny, the officer in charge will put his initial on. the form and the
particulars of the transfer instrument will be entered in the Share Transfer Register.
10) At periodic intervals, the register along with necessary transfer documents and enclosures will be
put up to the Board or the Shares Transfer Committee thereof if there is one or such other authority
as may be determined by the Board, in this behalf, depending upon the practice of the company
and the concerned authority will initial the Share Transfer Register for having approved the
transfer. The date of approval of the transfer will be indicated in the register.
11) Where transfers are duly approved, endorsements will be made on the share certificates in favour of the
transferee's and will be certified by the secretary or an officer authorized by the Board in this behalf. After
doing so, the share certificates will be returned to the sender along with a covering letter. Where new
certificates are to be issued, they have to be issued, in conformity with the Companies (Issue of Share
Certificates) Rules, 1960
12) Necessary entries shall be made in the Register of Members in regard to the transferor and the
transferee.
13) In case of a refusal to register the transfer, the company must send notice to the transferor and
transferee as per the provisions of Sec. 111 of the Companies Act

TRANSMISSION OF SHARES
"Transmission" means the passing of the title or property in the shares from one person to
another by the operation of law. Transmission takes place on the death, insolvency or lunacy of a member.
If the member is a limited company, transmission takes place in the event of the company going into
liquidation.
When a shareholder dies, his shares are transmitted to his legal representatives or executor of
administrator. In case of insolvency of a member, his shares are vested in the official assignee or receiver.
Similarly, when a member becomes insane, his shares vest in the guardian appointed by the Court.
The person to whom the shares are transmitted can validly transfer the shares to some other

33
person though he is not a member.
'
The dividend is that portion of the corporate profits which has een set aside and declared by the
shareholders" [Bache F. Guzdar V Commissioner of Income Tax].

"Dividend means the sum paid and received as the quotient, forming the share of the divisible
sum payable to the recipient" [Hanuman Prasad Gupta V Hiralal].

"Dividends are profits of a trading company divided amongst the members in proportion to their
shares. Such proportion may be determined by the articles, if not, dividend is paid on each share in
proportion to the nominal value of that share" [Oak Bank Oil Co. Crown].

1. Holding of the Meeting of the Members and Creditors:

A meeting of the members should be held and a special resolution to wind up should be passed in
the meeting. A meeting of the creditors should also be conducted either on the same day fixed for the
General Meeting or on the next day of the General Meeting [Sec. 500 (1)].

2. Provisions Regarding the Creditors' Meeting:

The following procedure should be followed regarding the creditors' meeting.
1. The notice of the meeting should be sent by post to each creditor simultaneously with the
sending of the notice for the general meeting [Sec. 500 (1)].
2. It should also be published in the Official Gazette and in two newspapers circulating in the district
in which the Registered Office is situated [Sec. 500 (2)].
3. A Statement of Affairs and a list of creditors and the amount due to them should be prepared and
placed at the meeting of the creditors.
4. If any resolution is passed in the creditors' meeting, a copy of the resolution should be filed with
the Registrar within 10 days from the date of passing the resolution [Sec. 501 (1)].

3. Appointment of Liquidators [Sec. 5021:

The members and the creditors at their respective meetings should appoint one or more
Liquidators. If they appoint the same person or persons as Liquidators, no complication will arise. If they
appoint different persons, the person nominated by the creditors alone is entitled to act as the Liquidator.
If no Liquidator is appointed by the creditors in their meeting, the person appointed by the members shall
be the Liquidator and vice versa.

4. Appointment of the Committee of Inspection:

The creditors may appoint a Committee of Inspection at their meeting. The Committee may
consist of a maximum of 6 members. The members can also appoint 5 more members to the Committee
appointed by the creditors. If the creditors want that the members appointed by the shareholders should
not act as the members of the Committee of Inspection, their nominees cannot act as such [Sec. 503 (3)

34
 5. Remuneration to Liquidator [Sec. 5041:
The remuneration to the Liquidator can be fixed by the Committee of Inspection. If no such
committee is appointed or the committee does not fix his remuneration, the creditors can fix the
remuneration. If his remuneration is not fixed either by the committee or by the creditors, the National
Company Law Tribunal shall fix the remuneration. The remuneration once fixed cannot be increased
without the permission of the National Company Law Tribunal.

6. Board's Powers to Cease on Appointment of Liquidator [Sec. 5051:

On the appointment of a liquidator, all the powers of the Board of directors shall cease. But the
committee of inspection, or if there is no such committee, the creditors, in general meeting, may
sanction the continuance of the Board.
7. Power to fill Vacancy in Office of Liquidator [Sec. 5061:
If a vacancy occurs by death, resignation or otherwise, in the office of a liquidator (other than a
liquidator appointed by, or by the direction of, the National Company Law Tribunal), the creditors in
general meeting may fill the vacancy.
8. Winding up Proceedings conducted by the Liquidator [Sec. 5081:
Winding up proceedings in creditors' voluntary winding up are similar to that of a members'
voluntary winding up, however, subject to certain exceptions. The procedure for winding up is as follows:
1. If the winding up process continues for more than one year, the Liquidator must call for a
meeting of the creditors as well as a meeting of the members at the end of the first year.
2. Meetings should also be called for at the end of each subsequent years, if the process of winding
up continues for more than one year.
3. A statement in the prescribed form with prescribed particulars must be submitted to the meetings.
Account of his acts and dealings must also be placed before the meetings by the Liquidator.
9. Final Meetings and Dissolution [Sec. 5091:
The following are the provisions of the Act regarding the final meetings and dissolution.
1. As soon as the affairs of the company are fully wound up, the Liquidator should prepare the
accounts of winding up. The accounts should show how the winding up has been conducted and
how the property of the company has been disposed of.
2. The Liquidator should then call for a meeting of the members and also the creditors. Each of the
meetings should be called by an advertisement in the Official Gazette and in the newspaper.
3. The Liquidator should submit the statement of affairs in each of the meetings.
4. Within a week after the date of the meetings, the Liquidator should send a copy of the accounts
along with a return to each of the meeting to the Registrar and official liquidator.
5. If a quorum (i.e. two persons) is not present at either of such meetings, the liquidator shall, make a
return that the meeting was duly called and that no quorum was instead of the return specified in
point 3 above present threat [Sec. 509[4]]
6. The Registrar, on receipt of the account as well as the return mentioned in point 3 above or the
return mentioned in point 4 above, shall register them immediately.
7. A similar copy should be sent to the Official Liquidator and the Official Liquidator should
submit a report thereon to the National Company Law Tribunal.

35
 QUESTION

BANK UNIT

III

1. Transfer deed should in Form No.

A. 6 B
B. 5 B
C. 7 B
D. None of these
ANSWER
C. 7 B

. is voluntary passage of the rights and duties of member from a share holde
E. Transfer
F. Transmission
G. Both (a) & (b)
H. None of the above
ANSWER
A. Transfer

2. The person who transfer his rights and duties is called

A. Transferee
B. Transferor
C. Promisor
D. Promisee
ANSWER
B. Transferor

3. The person to whom the rights and duties are endorsed is called

A. Transferee
B. Transferor
C. Endorser
D. Endorsee

36
ANSWER
A. Transferee

4. is an instrument of transfer signed by the transferor in which the name & dateare not filled.

A. Forged transfer
B. Blank transfer
C. Both (a) & (b)
D. None of the above
ANSWER
B. Blank transfer

5. transfer is null and void

A. Forged
B. r Blank
C. Both (a) & (b)
D. None of the above
ANSWER
A. Forged

6. If the ownership of shares goes to another by operation of law is called as

A. Transfer
B. Transmission
C. Both (a) & (b)
D. None of the above
ANSWER
B. Transmission

7. Transfer is effected by

A. Sales
B. Death
C. Insolvency
D. None of the above
ANSWER

37
E.
A. Sales

8. Transmission is effected by

A. Sale
B. Death
C. Insolvency
D. Both (b) &
(c) ANSWER
D. Both (b) & (c)

9. In which of the following stamp duty & consideration not necessary

A. Transfer
B. Transmission

C. Both (a) & (b)

D. None of the above
ANSWER
B. Transmission

10. gets all liabilities of original owner

A. Transferor
B. Transferee
C. Endorser
D. Endorsee
ANSWER
B. Transferee

11. A share warrant is transferable by

A. By Execution of transfer deed

B. By delivery
C. both a) and b)
D. None of the above
ANSWER
38
B. By delivery

PART – B (5 MARKS)

1. What are the contents of Share certificate?(April 2015)

2. What are the steps for issue of duplicate share warrants?(Nov 2016)

3. What is call? Explain legal provisions relating to the call?

4. What are the conditions for forfeiture? (April 2016)

5. What are the requirements of an allotment?

PART – C (10 MARKS)

1. Explain steps in the issue of share certificates.

2. Distinction between a share certificate and a share warrant. (April 2017)

3. What are the duties of secretary in allotment of shares?

4. Explain the steps in transmission of shares. (April 2017

39
 UNIT –III ABSTRACT

Name of the Paper : Secretarial Practice Class:III B.COM CA

Important
Keywords Definition
Question with
marks
1What are the contents of Share certificate
"Transmission" means the passing
2. Explain steps in the issue of share
of the title or property in the shares
certificates
from one person to another by the
Transmission 3What are the steps for issue of duplicate share
operation of law. Transmission takes
warrants
place on the death, insolvency or
4Distinction between a share certificate and a
lunacy of a member
share warrant.
Dematerialization is the process by 1. What are the duties of secretary in
which physical share certificates of allotment of shares?
an investor are taken back by the
company/registrar and destroyed. 2. What are the conditions for forfeiture?
Dematerialization
Then an equivalent number of
securities in the electronic form are 3. What are the requirements of an allotment
credited to the investors account
with his Depository Participant 4. Explain the steps in transmission of shares.

Signature of the Subject Incharge Head of the Department /Vice Principal

40
 UNIT-IV

BOARD MEETING

The term "Board" is a collective name for the 'directors' under the Companies Act [Sec. 252(3)].
The 'Board Meetings, therefore, means 'Meetings of Directors'. We have observed that the directors are
responsible for directing and governing the policy and management of a company. In fact the Board is the
top administrative organ of a company.
Wide powers have been vested in the Board in regard to management of companies by the Act.'
These powers are given to the directors as a body and not to any individual director. Hence, the directors
have to act as Board in a meeting for exercising their powers.
The articles, however, usually authorize the Board of Directors to delegate some of their powers to
a Committee of Directors or to the Managing Director

Board meetings are the most important meetings of the company. In practice, all the major
decisions relating to company matters, even in regard to those for which approval of the shareholders in
general meeting is required under the Act, are taken thereat.
A formal approval of the 'general body' of members is no, doubt obtained. But, since the director's,
s, their relatives and friends usually command the majority of the voting strength, at least of those who are
in position to attend the meetings, giving an oligarchic character to the management, the 'general body' is
reduced to merely a `Rubber Stamp' of the Board.
Therefore, the decisions taken at the Board's meeting are finally carried through in almost all
cases. It is for this reason that the Board meetings are of supreme importance in the working of a
company.

Secretarial work relating to Board Meetings

The articles of association usually make provisions regulating the board meetings and their
proceedings. The secretary must abide by these provisions and must ensure that every board meeting is
duly convened and properly constituted.
A meeting is said to be duly convened if proper notice is issued and it is said to be duly
constituted if it has the requisite quorum and there is a proper person in the chair. The duties of the
secretary relating to board meetings may be enumerated as follows:

41
1) Date Fixing.
The secretary on the requisition of a director shall summon a meeting of directors. Usually in
consultation with the Chairman, the secretary will fix the date, place and time of the meeting and
will also prepare the agenda (list of business) for the board meeting. There may be a special agenda
book for the board meeting.
2) Notice.
The secretary has to issue the notice and agenda to the directors as per instructions of the
chairman or any director. The length of the notice should be as per articles or it should be
reasonable.
3) Company Statements.
He has to keep in readiness periodical, financial and trading returns showing the company's
position relating to its financial and trading activities.

4) Documents for Sealing.

He has to keep in readiness necessary documents, letters, cheques, contracts, etc., for sealing and
for signing by the directors.

5) Transfer Statements.
He will also keep ready a Statement of Transfers, and the pending transfers to be registered and
the relevant share certificate for sealing and signing.

6) Persons in Attendance.
He may have to arrange for attendance of certain persons, e.g. solicitor's auditors, chief
accountant, departmental managers, etc. who are called 'persons in attendance'

7) Bank Account.
Bankers pass book and certificate of cash balances will also be secured giving the latest
information about the company's bank account and cash position.

8) Board Room Equipment.

Necessary seating arrangements, stationery, etc. will also be looked after for the board meeting.
Quorum. At the time of the meeting he will have to ascertain the presence of the requisite quorum.

9) Reading Notice.
The secretary may formally announce the opening of the meetin g by reading, the notice of the
meeting. This formality may not be followed in the board meeting, as these meetings are usually
informal.
10) Director's Attendance.

42
 Signatures of all the directors and also of persons in attendance, if any, must be taken in the
special book maintained for that purpose which is called 'Directors' Attendance Book.
11) Minutes of Last Meeting.
He is required to read the minutes of the last board meeting and get the signature of the chairman
to adopt the minutes as correct when the directors give their approval.
12) Supply of Information.
During the course of the meeting, he will have to give the information, explanations,
documents. etc.
13) Notes of Meeting.
He will have to take complete notes of the proceeding of the meeting.
14) Drafting of Minutes.
Minutes will be drafted on the basis of the chairman's notes and his own notes.
15) Actions on Board Decisions.
Finally, lie will have to carry out the orders and instructions of the board. The will or the decision
of the board is always executed through the secretary.

FREQUENCY OF BOARD MEETINGS

The Board meetings may be held as frequently as necessary. Normally they are held at regular
intervals, e.g., monthly, unless the company is so small as to require the directors to meet only when there
is sufficient business to warrant a meeting. Section 285, however, fixes a statutory minimum number of
such meetings to be held in a year for all companies incorporated under the Act. The Section provides that
a meeting of the Board of Directors must be held at least once in every three months and at least four such
meetings must be held every year.
The Central Government may, however, by notification iii Official Gazette, direct that this
provision shall not apply in relation to any class of companies or shall apply in relation thereto subject to
such exceptions, modifications or conditions as may be specified in the notification.
The Board of Directors has been given wide discretion to frame, rules and regulations regarding
the conduct of Board meetings. The power to convene Board meetings normally vests in the Chairman of
the Board.
The managing director, manager or secretary of the company must, at any, time, summon a
meeting of the Board on the requisition of a director. Meetings of the Board may be held anywhere, even in
informal circumstances, provided all the directors have been given proper notice and the directors present
at the meeting expressly waive formalities.
In Snzith vs. Paringa Mines Ltd..,' a directors' meeting was duly summoned for filling up a vacancy.
There were only two directors T and B, B being the Chairman,
T did riot attend, B went to T's personal office. and met him in the passa ge outside his office.
While standing there B proposed F's name. T objected. B being in the chair, gave his casting vote and
declared F elected. The Court upheld the election and observed: "There is no reason why a meeting should
not be held in the

43
NOTICE OF THE MEETING

Notice of every meeting of the Board of Directors of a company must be given in writing to ever y
director in India and at his usual address in India to every other director who is outside India for the time
being (Sec. 286). A director has no power to waive his right of notice.
Notice must be given to it director, even if he has stated that he will be unable to attend (Young
vs, Ladies Imperial Club'). It may be added here that an accidental omission to give due notice to any one
director will not as a rule invalidate the proceedings at the meeting.
There is no need to send the notice, if the articles provide for meetings to be held at regular
intervals, e.g., monthly, the time and place being fixed. Also, if all the directors should meet casually, and
are willing to hold a meeting, the meeting can be held notwithstanding the absence of notice (Smith vs.
Paringa Mines Ltd.').
Length of notice. Unless the articles provide a definite period of notice, a reasonable notice must
be given of the Board meeting. What is a reasonable notice will depend on any particular case. If a proper
notice is not given the proceedings are invalid unless all the directors are present at the meeting (Harbans
vs. Phillips').
Contents of notice:The notice should mention the place, time and date of the meeting. The day
must be a working day and the time should be during business hours 'unless agreed otherwise by all the
directors. It is not necessary to state in the notice the business to be transacted, unless t1e articles or the
Act so require. For example, specific notice of the resolutions in regard to the following items ofbusiness,
requiring unanimous consent of the directors present at the meeting and entitled to vote, is required under.
the Act and as such they must be included in the notice of the meeting:
1) Appointment as Managing Director, of a person who is already the Managing Director of one and not
more than one other company (Sec. 316).
2) Making inter-corporate loans and investments (Sec. 372A).
3) Appointment as the Manager, of a person who is already the Manager or Managing Director of one
and not more than one other company (Sec. 386).

AGENDA
The term 'Agenda' means things to be done. In the present context it is a statement of the
business to be transacted at a meeting. It also sets out the order in which the bus iness is to be dealt with.
Though the Companies Act does not make it obligatory on the Secretary to send an agenda or to
incorporate the same in the notice of Board meeting, yet by convention it necessarily accompanies the
notice calling the meeting. Otherwise, the members cannot come prepared for discussion on the points
on which resolutions have to be passed.

QUORUM
The term 'quorum' means the specified minimum number of qualified persons whose presence is
necessary for transacting legally binding business at the meeting. The quorum for the meeting of

44
the Board shall be one-third of its total strength (any fraction to be rounded off as one), or two directors
whichever is higher.
While determining the total strength, the vacancies are not counted. Again, the directors who are
interested in any of the resolutions to be passed at the Board meeting shall not be counted for die purpose
of quorum of that resolution.
If at any time the number of interested directors exceed or is equal to two-thirds of the total
strength of directors, then the remaining directors who are not interested will be the quorum for that item,
provided their number is not less than two (Sec. 287).

SECRETARIAL WORK REGARDING QUORUM

1. To ascertain from the articles the Quorum fixed for the meetings of members.
2. To Advice the chairman as to quorum in a meeting.
3. To see that Quorum for general Meetings consist of only members present in person (and not by
proxy).
4. To advice the chairman to dissolve or adjourn the meeting if Quorum is not , present within half
an hour of appointment time. No quorum is necessary at an adjourned meeting.
5. To draw attention of chairman if at any time during the meeting the quorum is not present.

RESOLUTION BY CIRCULATION

Normally resolutions are moved and passed at the meeting of the Board. But as per sec 289 there
may be ‘circular resolution’ which shall be deemed as passed at the Board’s meeting if its draft together
with necessary papers is circulated among all the directors and it has been approved by a majority of such
of them as are entitled to vote on the resolution.

BOARD RESOLUTIONS
Secretary is expected to secure expertise in drafting of resolutions. The wordings of a
resolution is expected to follow certain conventions.
When a new state of affairs is created by the act of passing a resolution, the words 'be and is
hereby' are included in the resolution to make the same effective from the time of passing the
resolution, otherwise the resolutions will be open to the interpretation of expressing a future intention
of doing some act.
When the decision or the resolution is to be given effect at a future date, or is subject to some
happenings or compliance of certain formalities, to make the decisions or resolution effective, the
words 'be adopted' are included in the resolution.
The following examples give an indication of the writer's above views:
a) "That Mr. A. be and is hereby, appointed secretary of the company..."where '.he intention is that
the appointment takes effect upon the passing of the resolution and is not conditional upon any
other happening e.g., the completion of a service agreement.

45
 b) "That Mr. A. be appointed secretary of the company..."where the appointment is to be effective
from some future date or is to be subject to some other happening
c) "That the name of the company be changed to X Ltd." because the new name adopted is subject to
the approval of the Central Government.
d) "That the Regulations contained in the draft document submitted to this meeting, and for the
purpose of identification subscribed by the chairman thereof, be adopted as the articles of
association of the company..." because it is necessary for the document to be printed and registered
by the Registrar of Companies after the resolution has been passed and filed in his office.

PROCEDURE AT BOARD MEETING

Before opening the proceedings of the meeting, the Chairman satisfies himself' that the meeting is
properly convened and that the quorum is present. When the proceedings start the Chairman requests the
secretary to read the 'minutes' of the last meeting.
As soon as the 'minutes' are read and approved as correct by the meeting, the Chairman will sign
the 'minutes'. He will, thereafter, take up the items for discussion according to the order set forth on the
Agenda, but with the consent of the meeting, he may alter the order.
During discussion the Chairman gives full opportunity to all the directors to express their opinion
on the subject matter.
After this if there is any difference of opinion, the motion is put to vot," ~If the majority votes are
cast in favour of the motion, resolution to this, effect will be passed. A director interested in any resolution
is not allowed to cast his vote 6n that particular resolution and this fact is recorded in the minutes—"that
Mr... being interested did not participate nor did he vote on the resolution.
"After all the items on the Agenda are over the Chairman declares the meeting closed. Throughout
the meeting the secretary keeps on taking notes of the proceedings on the basis of which he will write out
the 'minutes' of the meeting.

MINUTES OF BOARD MEETINGS

It constitutes a summary, as distinguished from reports, of the proceedings of a meeting. Dis-
cussion that preceded the adoption of a resolution may be material for a report but the decisions in the
shape of resolutions are material for the minutes.
An accurate record of minutes provides an invaluable proof of the proceedings specially if the
company is sued in law courts on any matter for which resolution was passed at a meeting.
According to Section 193 of the Act every company must keep minutes of the proceedings of
Board meetings or of every committee of the Board in books kept for that purpose, within 30 days of the
conclusion of the meeting.
The pages of the minutes books must be consecutively numbered and in no case there should be
attached by pasting or otherwise any extra page.
Each page of every such book shall be signed and the last page of the record of proceedings of

46
each meeting in such books shall be dated and signed by the Chairman of the meeting or the Chairman of
the next succeeding meeting Although the minutes require no approval from the directors before they
are signed by the Chairman, it is customary to read the minutes for approval at the next Board meeting,
and to get them signed by the Chairman after they have been approved by the Board.
It will be noticed that confirmation of the minutes of the last meeting is invariably an item of
agenda in Board meetings.
The Section further provides that the minutes of each meeting shall contain a fair and correct
summary of the proceedings threat and all appointments of officers made at such meeting shall be
included in the minutes of the meeting.
The minutes must also include the names of directors present at the meeting and the names of the
directors, if any, dissenting from the resolution passed at the meeting. However, the Chairman shall enjoy
an absolute discretion in regard to non-inclusion of any matter in the minutes which in his opinion is
defamatory of any person, is irrelevant or detrimental to the interests of the company.

CONTENTS:

The Board meeting minutes should contain the following:

(i) Name, place, date and time of the meeting.
(ii) Names of the directors present and also the names of the persons in attendance, viz., the
secretary, solicitor, etc.
(iii) Name of the person who took the Chair.
(iv) Granting of leave of absence.
(v) Confirmation of minutes of the previous meeting, and Committee, meetings, if any.
(vi) Various items of the agenda discussed at the meeting along with resolutions passed thereat.
(vii) Names of directors, if any, who dissented from the resolution, or who were personally interested in
any matter before the meeting.
(viii) Date of next meeting.
(ix) Vote of thanks.
(x) Chairman's signature with date in his own hand.
Two specimens of minutes of Board meetings are appended at the end of the chapter.
Meetings of shareholders are called General Meetings. Such meetings are of vital importance in
the working of a company.
For, although the general powers of management of a company are vested in the Board of
Directors, the consent of members opt such major issues as specified in Section 293 (already discussed in
Chapter 14) has to be obtained in their general meeting.
Otherwise also, it is fair to provide an opportunity to the shareholders to come together and review
the working of the company. Hence, the Companies Act has provided for various types of meetings of the
shareholders of a company.

TYPES OF GENERAL MEETINGS

47
 There are three types of general meetings of shareholders:
1) Statutory meeting,
2) Annual general meetings, and
3) Extraordinary- general meetings.
In addition to the above types of meetings, sometimes a meeting of a particular class of
shareholders may also be held. Such meetings are called "class meetings."
They are convened either by the company or by the court to affect variations in the rights of that
particular class of shareholders (Sec. 106') or in connection with a scheme of arrangement (Sec. 394)1 or
at the time of winding up of the company. A class meeting is Dot a general meeting but C similar rules
relating to convening and conducting of a meeting apply to it.
It is the first official general meeting of the shareholders. All public companies having share
capital except unlimited companies are required to a hold statutory meeting compulsorily. It implies that
private companies, unlimited companies and companies limited by guarantee but not having a share capital
are not required to hold such a meeting.
Statutory meeting must be held after one month but within six months of obtaining the 'certificate
to commence business' [Sec. 165(1)]. Unlike other types of general meetings, this it meeting is held only
once in the lifetime of a company.
The object of the statutory meeting is to provide an opportunity to the members, as early as
possible, of acquainting themselves with the assets and properties acquired so far and to discuss the
success of the flotation. The members are free to discuss any matter relating to the formation of the
company or arising out of the statutory report. But they cannot ass any resolution without previous notice
of at least 21 days [Sec. 165(7)].

NOTICE OF THE MEETING:

The directors are required to send notice of the meeting to all members of the company atleast 21
days before the date of the meeting stating that it is the statutory meeting of the company.
The fact that it is the statutory meeting must expressly be stated in the notice convening the meeting
(Gardner vs Iredale). (A specimen form of the Notice is given in Appendix A at the end of this chapter).

48
 Unit IV

1. The persons who are in charge of the management of the affairs of a company are termed as
.

1. Shareholders
2. Directors
3. Officers
4. Key Managerial Personnel

Answer: 2. Directors

2. Which of the following is not a duty of directors?

1. To act as per the articles of the company

2. To avoid conflict of interest
3. To make any undue gain
4. Not to assign his office

Answer: 4. To make any undue gain

3. The directors who hold office only up to the date of the next annual general meeting or the last date on
which the annual general meeting should have been held, whichever is earlier are termed
as .

1. Alternate Directors
2. Additional Directors
3. Independent Directors
4. Nominee Directors

Answer: 2. Additional Directors

4. What is meant by a nominee director?

1. A director designated by any institution

2. A director elected by Small Shareholders
3. A director appointed in casual vacancy
4. A director appointed to act on behalf of any other director during his absence from India

49
Answer: 1. A director designated by any institution

5. A director appointed by the Board shall hold office only up to the term of the
director in whose place he is appointed.

1. As an alternate director
2. To fill a casual vacancy
3. As an additional director
4. As a nominee director

Answer: 2. To fill a casual vacancy

6. A person proposed to be appointed as a director in a Company should obtain before

his appointment.

1. Corporate Identification Number

2. Charge Identification Number
3. Director Identification Number
4. All of the above

7. Which of the following companies may appoint a director elected by small shareholders?

1. Public companies
2. Listed companies
3. All companies having public borrowings from financial institutions, banks, or public deposits of
rupees fifty crores or more.
4. All of the above

Answer: 2. Listed Companies

8. A person shall not be eligible for appointment as a director of a company, if:

1. He is convicted by a court of any offense, whether involving moral turpitude or otherwise, and
sentenced in respect thereof to imprisonment for not less than 6 months.
2. He is an undischarged insolvent.
3. He is of unsound mind.
4. All of the above.

Answer: 4. All of the above.

9. Within how many days the Company should intimate the appointment/resignation of the director to
the Registrar of Companies?

1. 60 days
2. 30 days
3. 15 days
4. 90 days

50
Answer: 2. 30 days

10.Directors are of the company

A. Employees
B. Employers
C. Both a & b
D. None of the above
ANSWER
D. None of the above
11. A special resolution is passed with

A. Simple majority
B. 60% majority of members present
C. 75%
D. None of the above
ANSWER
C. 75%

12. In which one or more of the following company a member does not have a right toappoint proxy:

A. Public company having share capital

B. Public company not having share capital
C. Private company not having a share capital
D. None of the above
ANSWER
A. Public company having share capital
13. A proxy must bear revenue stamp worth.

A. 30 paise
B. 15 paise
C. 45 paise
D. 50 paise

51
ANSWER
B. 15 paise
14. In which one of the following cases an ordinary resolution may be passed

A. Commencement of a new business

B. alteration of articles
C. Compulsory winding up of the company
D. none of the above
ANSWER
C. Compulsory winding up of the company
15. An official liquidator is appointed by the _

A. Central government
B. By court
C. State government
D. Compan
yANSWER
A. Central government

PART - B

1. Explain about the secretarial work relating to board meeting.

2.Write about the frequency of board meeting.(Nov 2016) 3.Write
down the contents of the notice.

PART - C

1. Explain about the types of the meeting.(Nov 2017)

2. Explain the procedures to be followed at the various types of meeting (April 2016)

52
 Name of the Paper : Secretarial Practice Class:III B.COM CA

Important
Keywords Definition
Question with
marks
The term 'quorum' means the 1. Explain about the secretarial work relating
specified minimum number of to board meeting.
qualified persons whose presence
QUORUM 2.Write about the frequency of board
is necessary for transacting
legally binding business at the meeting.
meeting.
3.Write down the contents of the notice.

1. Explain about the types of the meeting

2. Explain the procedures to be followed at the

AGENDA 'Agenda' means things to be done. In various types of meeting
the present context it is a statement of
the business to be transacted at a
meeting.

Signature of the Subject Incharge Head of the Department/Vice Principal

53
 UNIT-V

PROCEDURE AT THE STATUTORY MEETING

At the commencement of the meeting, the chairman will ask the secretary to read the notice of the
meeting. The Board should then place before the meeting a list showing the names, addresses and
occupations of the members of the company and the number of shares held by them respectively.
The list must remain open and accessible to any member during the continuance of the meeting
[Sec. 165(6)]. After the notice has been read, the chairman takes up the items of business according to the
Agenda.
He will request the members to take the Statutory Report, already circulated, as read. Thereafter he
will address the meeting explaining the progress made by the company since its incorporation, the present
position and the future prospects.
After this he will invite discussions and questions pertaining to the Statutory Report and other
related matters.
After discussion of members the chairman proposes that the Statutory Report be approved the
meeting may be adjourned from time to time and at any adjourned meeting, any resolution of which notice
has been given in accordance with provisions of this Act, before or after the former meeting, may be
passed; and the adjourned meeting shall have the same powers as an original meeting.
After all the items on the agenda are over, the meeting will be dispersed with a vote of thanks to
the chair.

SECRETARIAL WORK RELATING TO THE STATUTORY MEETING

The duties of the secretary relating to the statutory meeting are as follows:

Before the meeting.

1. It is the duty of the secretary to keep in mind the tine limit prescribed by the Act for holding the
statutory meeting.
2. He should prepare the 'statutory report' in the prescribed form -and the notice of the meeting.
3. He should convene a meeting of the Board of Directors to consider and approve the statutory
report and the notice.

54
 4. The secretary should then arrange for printing of the statutory report and the notice and
dispatching them to the members at least 21 days before t lie date of the meeting. A certified copy
of the report must also be filed with the Registrar.
5. He should prepare an agenda of the meeting in consultation with the chairman.
6. He has also to prepare a list of members showing names, addresses and the number of shares held
by each one of them for placing before the meeting.
7. He has to make necessary seating arrangements, etc., for holding the meeting.
8. At the meeting. 8. He has to help the chairman is ascertaining the quo- rum and to read the notice of
the meeting.
9. If directed by the chairman, he has to read the statutory report.
10. He has to produce the list of members at the meeting.
11. He has to assist the chairman on any points of procedure and to supply necessary explanations
when required.
12. He is to take full notes of the proceedings of the meeting.

After the meeting.

13. He has to draft the minutes of the meeting on the basis of notes taken by him and to get the same
approved and signed by the chairman of the same meeting within 30 days of the conclusion of the
meeting.)

ANNUAL GENERAL MEETING

Every company must in each year hold in addition to any other meetings a general meeting as its
annual general meeting [Sec. 166(1)].
It is the most important meeting of the members of a company. It is held each year with a view to
reviewing and evaluating the overall progress of the company during a year.
The annual general meeting is sometimes called 'ordinary general meeting' as usually it deals with
the so-called 'ordinary business.'
The following ordinary business must be transacted at the annual general meeting of a public
company [Sec. 173(1)(a)]:
a) the consideration of the Annual Accounts, Balance Sheet and the Reports of the Board of
Directors and Auditors,
b) the declaration of a dividend,
c) the appointment of directors in the place of those retiring, and
d) the appointment of, and the fixation of the remuneration of, the auditors
Any other business on agenda except that listed above shall be considered as special business and
may also be transacted at the Annual General Meeting, provided appropriate notice has been given.
It is to be noted that in the case of extraordinary general meetings all business shall be treated as
"special business" [Sec. 173(1)(b)]. It is relevant to state that the `ordinary business' requires an ordinary
resolution while the 'special business' may require ordinary or special resolution as per Articles or the Act.

55
EXTRAORDINARY GENERAL MEETING
All general meetings other than the statutory and annual general meetings; are called extraordinary
general meetings. Regulation 47 of 'Table A' defines: "All general meetings other than annual general
meetings shall be called extraordinary general meetings."
These meetings may be convened by the company at any time. The business transacted at an
extraordinary general meeting comprises anything which cannot be postponed till the next Annual General
Meeting, e.g., changes in memorandum and articles of association, reduction and reorganization of share
capital, issue of debentures, etc.

PROCEEDINGS OF THE DEBATE

Motions
A 'motion' is a proposal on any item of business put before a meeting for consideration and
adoption. No decision on an important matter can be taken by a meeting without a motion being moved.
Subject to the articles, a motion requires a prior notice so that it may be included in the agenda.
However, formal motions like motion for condolence, motion for environment of the meeting, motion for
appointment of chairman may be moved without previous notice. A motion is generally required to be
seconded but a motion initiated by the chairman needs no seconding.
The term `minutes' means a concise and accurate official record of the business transacted at
company meetings. It normally includes only the resolutions actually passed.
It is not necessary to record therein the discussion which preceded the adop tion of a resolution.
"Minutes are more analogous to a telegram than to a letter, to a precise than to a narrative Minutes may be
of two types:

a) Minutes of narration. Minutes recording 'vents or items of business which require no formal
resolution are called minutes of narration. For example, noting of members present, recording of facts like
calling the meeting to order by the chairman, that the notice was read, that the auditors' report was read,
that the directors' report and accounts were read or were taken as read etc., form the minutes of narration.

b) Minutes of resolution. Minutes recording formal resolutions are referred to as minutes of resolution or
minutes of decision. These may, or may not, be accompanied by a statement indicating the names of the
mover (proposer) and seconder.
`Minutes' distinguished from 'Reports'. `Minutes' should not be 01111used. with 'Reports.'
A 'Report' is the general account of all matters discussed at the meeting and is much more
detailed. Besides embodying all the facts of the 'Minutes' it contains the names of the proposers and the,
ioconders, remarks of speakers both for and against each motion, the manner of voting on the motions, etc.
Further, 'minutes' are documentary evidence and has the legal recognition by virtue of provisions

56
contained in the Act, 'reports', on the other hand have no legal sanctity.

Drafting.

The minutes are usually written from the notes taken by the chairman and secretary during the course of
the meeting. They must be drafted in such a manner that there is no ambiguity in interpretation. The
minutes must be recorded in paragraphs serially numbered. Each paragraph should preferably be given a
heading.

Contents:

The minutes must incorporate the following facts:

i) The nature of the meeting—annual general meeting or extraordinary general meeting.
ii) The number of the meeting, say, the eighth Annual General Meeting.
iii) The name of the Company.
iv) The date, time and place of the meeting.
v) The names of the Chairman and Secretary.
vi) The names of the members present at the meeting with a view to indicating the presence of a
quorum. Where the attending members are very large in number, it would suffice to state that
all the shareholders were present or that so many (actual number) members were present.
vii) All the resolutions passed at the meeting. They will of course be in the same order as the
agenda.
viii) Vote of thanks.
ix) Chairman's signature with date in his own hand. The secretary should also initial the minutes.
The minutes should also state matters on which no formal decisions were made, e.g., that the notice
was read, that the auditors' report was read, that the directors' report and accounts were read or were taken
as read. If certain matters could not be discussed because of want of time, that fact must also be stated
ther

Question Bank

1. Majority rule is not applicable when

A. The act done is illegal

B. The act done is ultra vires the company.
C. The act done constitutes a fraud
D. all the above

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ANSWER
D. all the above
2. A cost auditor makes his report to:

A. Members of company
B. Directors of company
C. Registrar
D. C. G.
ANSWE
R
B. Directors of company
3. A company not declare dividend at.

A. Statutory meeting
B. Annual general meeting
C. Extra ordinary G.M
D. None of the above
ANSWER
A. Statutory meeting
4. If as a person is present in more than 1 capacity his presence will be counted as

A. 1
B. 2
C. 3
D. 4
ANSWE
R
B. 2
5. In the absence of a quorum the proceedings of the meeting will be

A. Valid
B. Void
C. Voidable
D. None of the above
ANSWER
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B. Void

6. If quorum is not present with in time the meeting is stand dissolved.

A. ½ Hr.
B. 1 Hr.
C. 1 ½ Hr
D. 2 Hr.
ANSWE
R
A. ½ Hr.
7. Order to call a EGM even though 1 member present in person or by proxy.

A. ROC
B. C.G.
C. NCLT
D. D.C.
A
ANSWE
R
B. C.G.
8. can vote at the meeting even though not a member.

A. Body corporate
B. President
C. Governor
D. All the above
ANSWER
D. All the above
9. Voting right can’t be exercised in case of

A. Calls in advance
B. Calls in arrears
C. Both a & b
D. None of the above
ANSWER
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B. Calls in arrears

10. Proxy need not be a of the company

A. Shareholders
B. Members
C. Both a and b
D. None of the above
ANSWER
C. Both a and b
11. is the official recording of the proceedings of a meeting

A. Quorum
B. Minutes
C. Both a & b
D. None of the above
ANSWER
B. Minutes
12. Minutes should be recorded within days from the date of conclusion of everymeeting

A. 10
B. 20
C. 30
D. 40
ANSWE
R
C. 30

13. Loose – leaf minutes to be bound into books at regular intervals of months

A. 6
B. 7
C. 8
D. 9
ANSWE
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R
A. 6
14. Within weeks requisition requiring circulation of a resolution may be deposited with ROC.
A. 6
B. 9
C. 12
ANSWE
R
A. 3

15. Qualification shares for a director are provided in the

A. Company Act
B. MOA
C. AOA
D. Contract b/w Company &
Directors ANSWER
A. Company Act

PART – B (5 MARKS)

11. a) .Explain about the appointment of a company secretary. (April 2017) (OR)
b). Write down the statutory duties of a company secretary. (April 2016)
12. a) Write about communication and correspondence.(Nov 2017) (OR
) b).Explain about the types of organization charts.(April 2017)
13. a). What are the conditions for forfeiture? (April 2016) (OR
) b). What are the requirements of an allotment?
14. a). Procedure at thre statutory meeting – Explain. (OR )
b).Secretarial Work Relating To The Statutory Meeting
15.a).Meaning of Statutory Meeting ? (OR
) b).Annual General Meeting - meaning

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PART – C (10 MARKS)
16. Explain the kinds of company secretary. (Nov 2017)

17. Explain about the maintenance of records.(April 2016)

18. Explain the steps in transmission of shares. (April 2017)

19.Explain the procedures to be followed at the various types of meeting (April 2016)

20.Secretarial Work Relating To The Statutory Meeting

62
 UNIT – V ABSTRACT

Name of the Paper : Secretarial Practice Class:III B.COM CA

Important
Keywords Definition
Question with
marks
Minutes recording formal resolutions
are referred to as minutes of 1..Explain about the appointment of a
resolution or minutes of decision. company secretary.
These may, or may not, be 2. Write down the statutory duties of a company
Minutes of resolution
accompanied by a statement secretary.
indicating the names of the mover 3 Write about communication and
(proposer) and seconder. correspondence.

The minutes are usually written from

Drafting. the notes taken by the chairman and 1.Explain the kinds of company secretary.
secretary during the course of the
2.Explain about the maintenance of records.
meeting.
3. Explain the steps in transmission of shares.

Signature of the Subject ncharge Head of the Department/Vice Principal

63
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