Appointment & Dismissal of Company Secretary - Auditing & Secretarial practice | Auditing and Secretarial Practice - B Com PDF Download

Procedure for appointment of Company Secretary

NOTE 

According to sub-section (1) of this section, every company having a prescribed paid-up share capital shall have a whole-time secretary. However, the proviso to sub-section (1) states that every company not required to employ a whole time secretary under sub-section (1) shall file with the Registrar a certificate from a secretary in whole-time practice in the prescribed form. The 'whole-time secretary' indicates that a Company Secretary must be in the employment of the company. 

According to, sub-section (1), where the Board of directors of any such company comprises only two directors, neither of them shall be the secretary of the company. According to regulation 82(2) of Table A, a director may be appointed as manager or secretary However, this regulation is “Subject to the provisions of the Act.” Thus the power conferred on the Board by this regulation has to be exercised subject to the sub-section (1). Accordingly, a director may be appointed as secretary provided, however, that where the Board of directors of a company having the paid-up share capital prescribed for the purposes of section 383A, comprises only two directors, neither of them shall be appointed as the secretary. 

Section 383A does not expressly provide as to who can appoint a secretary. However, having regard to the position, duties and functions of a secretary it is advisable that the Board of directors appoints the Secretary, by its resolution. 

Every Company having a paid up Capital of Rs. 5, 00, 00,000/- (Rupees five crores only) or more shall have a whole time company secretary holding a membership of the Institute of Company Secretary of India. 

Paid up Capital includes Equity Share Capital as well as Preference Share Capital.

Procedure for Removal of Company Secretary

Company Secretaries are primarily responsible for the efficient administration of a company, in relation to ensuring compliance with statutory and regulatory requirements and ensuring that the Board decisions are effectively implemented. For removal of Company Secretary following procedures are required to be followed by a Company

1)  Convene Board Meeting

After giving notice to all directors, a Board Meeting should be convened in order to take decisions of removing the existing Company Secretary. If company secretaries are named in the Articles of Association it also needs to be altered.

2)  Intimate the Secretary

The Secretary to be removed shall be intimated regarding Board decisions & should be asked to give representation to the Board within 15 days of intimation

3) Convene Board Meeting 2^nd Time

• For considering the representation, if any made by the Secretary & to cancel the agreement being entered by the company with the Secretary another Board Meeting should be convened.

• Appoint another Secretary in the same meeting.

4)  Inform the ROC

File e-Form 32 with the ROC to intimate about the removal of existing Company Secretary and appointment of new Company Secretary within 30 days of removal after payment of requisite fees.

5)  Sign & certify the e-form

• E-Form to be digitally signed by the managing director, manager or secretary of the company

• Also, the e-Form to be duly certified by a chartered accountant or cost accountant or company secretary in whole time practice by digitally signing the same.

6)  Penal Provisions

• Failure to give notice - If any officer fails to give notice for Board Meeting shall be punishable with a fine of Rs. 1000.

• Default in complying requirements - The Company and every officer in default shall be punishable with a fine of up to Rs. 500 for everyday during which the default continues.