Public companies having a paid up capital of Rs 10 crore should have whole time company secretary
Picture for representational purpose
Mumbai: The Companies Rules notified under the Companies Act, 2013 has disappointed company secretaries as it has significantly reduced the scope of their role thereby adversely impacting the career prospects of thousands of company secretaries in India. The new rules have also raised concerns among lakhs of students who are currently pursuing the course with the Institute of Company Secretaries of India (ICSI).
The Companies Act, 1956, required all companies, whether private or public, having a paid up capital of Rs5 crore or more to engage a whole time company secretary. But the rules framed under the Companies Act, 2013, states that only public companies having a paid up capital of Rs10 crore or more should have a whole time company secretary. Out of 10 lakh companies registered in India, there are only 6,000 public companies, which are having a paid up capital of over Rs10 crore. On the other hand there are around 35,000 qualified company secretaries in India and an additional 4.5 lakh aspiring students.
“As a consequence, only less than 0.5 per cent of the companies would be required to have a company secretary. This is against the solemn commitment made to parliamentary standing committee, the draft rules notified in August, 2013, the policies followed so far under the Companies Act, 1956 and the spirit of the company law,” said M.S.Sahoo, secretary, ICSI.
The law casts specific responsibilities on the company secretaries, which are mostly to ensure compliance with the applicable laws and corporate governance norms. “The rules give an impression that over 99.5 per cent of the companies do not require compliance as they are not required to have a company secretary. It is not in the public interest to keep private firms out of the purview of applicable laws,” he added.
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