The day-to-day activities of a business become complex and to comply with all, having the supervision of an expert is required. Also, under the Companies Act, the government made more compliance for businesses and following all these becomes complex.
A well-versed individual who has knowledge of corporate law must be appointed to take care of daily company affairs. The company secretary is an individual who can fulfil all these requirements of a company. Below in this article, the roles and responsibilities of a company secretary are shared, check to get the complete information about a CS.
A company secretary is an important part of a company’s managerial and administrative departments. They can bring growth to the company with their knowledge of corporate laws. Also, they can comply with other laws that a company needs such as labour law, taxation law, and banking law.
Under Sec. 2(l)(c) of the Company Secretaries Act 1980, a company secretary is defined as "a person who is a member of the Institute of Company Secretaries of India.” Thus, a Company Secretary may be defined as an individual who possesses qualifications prescribed in law and is appointed to perform the duties of a secretary laid down in the Companies Act and any other ministerial or administrative duties.
On the basis of the above definition, the following points should be noted:
A company secretary is an integral part of a company, so he/she must check whether the company is complying with the legal provisions or not. If the company activities are not as per the legal provisions then he/she will be responsible for the misconduct and for that they can be dismissed. So, below we share the role of the company secretary that must be complied with by an individual.
In the Companies Act, the role of a CS is to incorporate of company and authenticate the documents. Also, share all the details with the registrar including the application for an increase in capital. Keep records of share warrant holders, file annual returns, and sign financial statements and reports for authentication.
It is the duty of CS to check that income tax is deducted at source from the dividends and interests payable and from the salaries of employees. Also, check that income tax returns must be filed with the Income-tax authorities and issue certificates of income tax deducted to every shareholder receiving dividends or debenture holders receiving interest.
Check every legal document, Share Certificate, Transfer Form, Share Warrant, Debenture Certificate, Mortgage and Charges, Hundis, Promissory Notes, etc. are affixed with stamps of requisite amounts.
Under the Sales Tax Act, CS will check that tax returns are submitted to the Sales Tax Authorities and timely payment of these taxes will be done. Other acts are the Factories FEMA Act, Foreign Exchange Management Act, State Insurance Act, and Industrial Dispute Act, he/she must comply with all the relevant requirements.
Other than the statutory duties, a company secretary has to perform many other duties covering the company's activities. These duties are known as general duties and these are as follows:
The following are the responsibilities of a company secretary:
In a company secretarial roles, the CS is the one who verifies whether the company is complying with certain guidelines and laws mentioned in the memorandum of the company or not. For the smooth monitoring and functioning of the organization complying with the set standards is required. These company secretary functions fall under Section 204 of the Companies Act, 2013. It's not merely a role; the Act clearly states that it is the duty of the CS to perform such audits of listed and prescribed companies.
A Company Secretary acts as a channel of communication between the Board of Directors, investors, and authorities responsible for regulation and functioning. He/she is not just a link between various entities in the company, they are also the guide who advises the directors and the chairman on their roles and powers in the company
Since a CS is well versed in the laws of the company, he often provides legal advice to the executives. And once the matter goes to a court of law, he is the one who guards the rights of the company by seeking legal advice from those who have a command over the subject. Apart from these roles and responsibilities, a CS is also expected to adhere to certain legal aspects which include the following:
Cross-verify the legal necessities needed for all the paraphernalia related to share certificates such as their issuance, transfer etc. Since he discusses various matters with the chairman and the board of directors. He is the one who helps and advises them on how to implement certain guidelines effectively.
Also acts as a liaison between various shareholders and the company to achieve mutual benefits. In the company secretarial roles, overseeing the timely flow of dividends in accordance with the laws enshrined in the company's memorandum.
While a CS does mostly legal work and oversees various issues related to it. He also has to maintain records and information of members, directors, shares, investors etc.
As mentioned already, ever since the Companies Act, 2013 came into effect, a CS has got more powers and his roles and responsibilities have become more direct and clear. Under section 203 of the same act, the companies are now required to appoint whole-time managerial personnel depending on the category of the company as prescribed by the government in the centre.
This has been done to ensure corporate regulation and efficient governance. In the appointment of the CEO and CFO the law requires the companies to have a Company Secretary goes on to explain how important a CS is in modern times.