Appointment of company secretary or CS is governed by the Indian companies act. According to this act, a company secretary is to be appointed and/or compliance certificate is to be obtained based on the paid up share capitals of the company.
Companies having paid up share capital of Rs. 10 lakh or more but less than Rs. 2 crore is not required employing a whole time secretary but shall file with the ROC a certificate from a company secretary who is in whole time practice. Such certificate has to be laid down in annual general meeting.
Companies having paid up share capital of Rs. 2 Crores or more but less than Rs. 5 Crores may appoint any individual, who is a member of ICSI as a whole time CS. If such appointments are made then it is not required to get a certificate from a CS in whole time practice under rule 3 of companies (compliance certificate) rules, 2001 or else they have to obtain a compliance certificate and file it with ROC.
Companies having paid up share capital of 5 crores or more must have a whole time CS.
Companies listed in stock exchange of India are required to compulsorily have a whole time secretary as a compliance officer as per the provisions of the listing agreement.
Penalty of non compliance
The company and every officer of such company who is in default of not complying with the above provisions shall be punishable with fine which may extend to Rs. 500 per day during which the default continues.
Penalty may not be levied if it can be proved that, all reasonable efforts are being taken by them to comply with the provisions or the financial position of the company was such that it was beyond its capacity to engage a whole time company secretary.
Ceiling limit of compliance certificate for company secretary (CS)
A CS in whole time practice cannot issue secretarial compliance certificates to more than 80 companies in any calendar year starting from 1st January, 2003.
- Companies having paid up share capital of less than Rs. 10 Lakhs are not required to comply with any of the provisions related to company secretary appointment or compliance certificate.
- Companies having share capital of 10 lakhs or more but less than Rs. 2 Crores are not required to compulsorily appoint a company secretary but they have to obtain compliance certificate from a CS in whole time practice.
- If such company’s paid up share capital is more than Rs. 2 Crores and less than Rs. 5 crore then it is not mandatory to employ a whole time company secretary but a compliance certificate has to be obtained from a CS who is in whole time practice. In case a company secretary has been employed by such company then compliance certificate need not be obtained from a company secretary (CS) who is in whole time practice.
- Company having paid up share capital of more than Rs. 5 Crores must appoint a whole time secretary