Tag: role of a Company Secretary

The Role of a Company Secretary

Company Secretary is a position which is required in organizations around the world who have a certain value of paid up capital. This role denotes a high managerial position who becomes a legal representative of the company in most cases. A Company Secretary not only ensures that the Board of the company is working as per the legal directives of the country or state, but they are also responsible to ensure that the administration of the company is efficiently run and in accordance with the legal and corporate laws as set down in a country or state where the company operates.

The Role of a Company Secretary The roles and responsibilities of a Company Secretary may vary from country to country as per corporate laws but there are some essential functions which remain the same. In all sectors, private or public, there are some responsibilities at the Board level involving governance, rules and regulation and corporate conduct which need to be followed. When board or shareholder, trustee meetings are held, these need to comply with the legal, listing and regulatory requirements and so forth. These form the key responsibilities of a Company Secretary. They not only ensure compliance of the board workings as per the directives of the corporate laws, they also ensure that the decisions of the board meetings in a company are properly implemented. Proper management of the shareholders meetings and maintaining communication with the shareholders is another important role of a Company Secretary.

The responsibilities of a Company Secretary do not stop at the senior managerial or board level. They need to ensure proper running of the administration of a company which involves looking into contracts formed with customers or regulatory bodies, property administration, overlooking the management of employee benefits schemes such as pension funds or employee shares, insurance administration, financial accounts and so forth.

In North America, company or corporate secretaries have an important role to play in ensuring corporate governance in a company. They encourage the board to conduct corporate governance reviews and to issue statements of their sound corporate governance principle to the shareholders or institutional investors.

In India, a Company Secretary of a company is required to issue compliance reports and other provisions as may be required by the Companies Act of 1956. The annual returns of a company as listed on recognized stock exchanges throughout the country can only be issued after a practicing Company Secretary signs it. Such a role is recognized as similar to that of a Compliance Officer by SEBI or Securities and Exchange Board of India and they can issue compliance certificates on behalf of a company. The RBI also recognizes practicing Company Secretary as authorized personnel to sign issuing certificates on behalf of the company.

Which Companies Require Company Secretaries?

Company secretaries are professionals who are known as parachute professionals since they are said to “parachute” into the boardroom of corporate offices from day one in their CS careers. It might sound a little exaggerated, but it is true that a Company Secretary is someone qualified to advise the board on the legalities of their decisions and to look into all forms of governance and administrative matters.

There are many companies which require a Company Secretary. No matter what industry a company operates in, there are always legal aspects of every function that a company needs to deal with to remain on the right side of the law. And with most companies now being listed on the stock exchanges, it is imperative that a company practices good corporate governance and communicates effectively to shareholders to hold the confidence of the market. For consulting on all such functions a Company Secretary is mandatory by law in most cases.

Alternate text: In India the section 383A of the Companies Act 1956 states that, every company which has a paid up share capital of over five crores, needs to employ a Company Secretary. The companies which have lesser amount of paid up capital also need to obtain compliance certificates from practicing company secretaries.

Since the opening up of the Indian economy, there are many large corporate and companies today in India, private as well as public. These provide ample career opportunities for company secretaries. Any organization which has a board or council structures needs the services of a Company Secretary; then again, central government offices mostly require company secretaries to look into the legal functions.

Many banks, especially the nationalized ones, have finance, law, accounts departments which require the expertise of company secretaries. Thus, there are career opportunities for company secretaries in the banking sector as well.

Companies today, even if they have a paid up capital less than five crores, often opt to have a certified Company Secretary on their rolls for a variety of reasons. When a company gets listed on a stock exchange of the country, they need to issue annual statements which a Company Secretary is authorized to sign. Communication between the management and the shareholders is another important role of a Company Secretary. Such professionals can also advise different functions on their legal aspects such as production, finance, sales, manufacturing, administration and others. Contracts to be signed, certificates to be issued all need the expertise and authorization of a Company Secretary.

Thus, there is scope for company secretaries in all types of industries, from public to private.

Company Secretary Job Description

Company Secretary job descriptions may be found amongst the personnel files of every type of organization. Most organizations in India require the role of a Company Secretary and only a duly qualified person can perform such a function.

As per Section 383A of Companies Act, 1956, every company whose paid up share capital is five crores and more, they need to employ a Company Secretary as a full time employee. The legalities of every firm need to be looked into and even for companies which have a smaller share of paid up capital, they need to have compliance certificates issued by practicing company secretaries.

Company Secretary Job Description The job description of a Company Secretary would show that it is a multifaceted role since one needs to have knowledge about each function that exists in an organization. Such a role requires one to assume responsibility of the legal aspects of all functions and to ensure that every activity of an organization is legally sound.

Most of the role of a Company Secretary consists of financial or legislative matters of an organization. When a company decides to go public, there are many legal and governance issues that need to be looked into and here is where a Company Secretary’s role becomes paramount. The annual statements which are issued to the stock exchange can only be signed by a Company Secretary; again, audit results which are issued also need to be signed by a CS, thus indicating the responsibility and importance that such a role evokes.

No matter which sector or industry a Company Secretary is employed, his or her role consists primarily of looking into governance mechanisms and structures of an organization and ensuring corporate conduct in board or shareholder meetings. The decisions which are taken in such meetings need to comply with the legal and regulatory requirements as well as listing requirements on the stock exchanges. The induction of trustees and training of non-executives, issuance of reports and circulars to shareholders, employee benefits schemes administration – they all fall within the purview of a Company Secretary’s job description. They also need to look into insurance administration, contracts that are signed with buyers, suppliers or customers, the various risks associated with an organization’s business, property administration and financial accounting statements all need to be scrutinized by a Company Secretary to ensure legal soundness of the same. They are also important members to confer with in matters of corporate planning and strategizing.

Thus, the Company Secretary job description is a comprehensive one and includes overseeing of legal and governance aspects of all functions within an organization.

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