Transcript Legal Metrology (Packaged Commodities) Rules, 2011

COMPANY SECRETARIES
IN COMPANIES BILL, 2011
CS. Bilu Balakrishnan
Corporate Intelligence Education & Research
COMPANIES BILL, 2011
Corporate Affairs Minister, Mr Veerappa Moily introduced the Companies Bill, 2011 on Wednesday
the 14th December, 2011 in Parliament Lok Sabha. The Bill was cleared by the Cabinet on
November 24, 2011.
On 18th Dec 2012 the Bill Amendments was presented by Mr. Sachin Pilot, the current
Minster of Corporate Affairs, at the Lok Sabha around by 10.30+ PM, and got it approved.
The New Companies Bill, 2011 have 29 Chapters, 407 Clauses (Sections) & 7 Schedules
COMPANY SECRETARIES
& COMPANIES BILL, 2011
The Company Secretary (CS in short) profession has lot more in
the new Bill. This presentation intents to have a birds eye view of
what is in the cards for the CS profession.
Views / Comments: [email protected]
Presentation Series 01 on New Company Law in India
This presentation includes the major provisions pertaining to company
secretary profession, and a comparison with the provisions of existing
Companies Act 1956 vis-à-vis Companies Bill 2011
All contents prepared from the proposed Companies Bill, 2011 as
introduced in Parliament. Please refer to any updates from time-to-time.
This presentation document is Open Source, any individual can host the
same in websites / blogs. Alteration of this presentation in any form is an
offence, and an infringement of the copyright of the author.
Copyright 2012 Corporate Intelligence Education & Research (CIER)
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CS IN DEFINITIONS
Definition of CS:
2 (24) “company secretary” or “secretary” means a company secretary as defined
in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980
who is appointed by a company to perform the functions of a company secretary
under this Act;
Definition of CS in Practice:
2 (25) “company secretary in practice” means a company secretary who is deemed
to be in practice under sub-section (2) of section 2 of the Company Secretaries Act,
1980;
Definition of Expert:
2 (38) “expert” includes an engineer, a valuer, a chartered accountant, a company
secretary, a cost accountant and any other person who has the power or authority
to issue a certificate in pursuance of any law for the time being in force;
CS IN DEFINITIONS (CONT.)
Definition of Key Managerial Personnel:
2 (51) “key managerial personnel”, in relation to a company, means—
(i) the Chief Executive Officer or the managing director or the manager;
(ii) the company secretary;
(iii) the Chief Financial Officer if the Board of Directors appoints him;
and
(iv) such other officer as may be prescribed.
CS ROLE IN INCORPORATION & PROSPECTUS
DOCUMENT OF A COMPANY
7. (1) There shall be filed with the Registrar within whose jurisdiction the registered
office of a company is proposed to be situated, the following documents and information for
registration, namely:—
(a) the memorandum and articles of the company duly signed by all the
subscribers to the memorandum in such manner as may be prescribed;
(b) a declaration in the prescribed form by an advocate, a chartered accountant,
cost accountant or company secretary in practice, who is engaged in the formation of
the company, and by a person named in the articles as a director, manager or secretary
of the company, that all the requirements of this Act and the rules made thereunder in
Respect…………………
26. (1) Every prospectus issued by or on behalf of a public company either with
reference to its formation or subsequently, or by or on behalf of any person who is or has
been engaged or interested in the formation of a public company, shall be dated and signed
and shall—
(a) state the following information, namely:—
(i) names and addresses of the registered office of the company, company
secretary, Chief Financial Officer, auditors, legal advisers, bankers, trustees, if
any, underwriters and such other persons as may be prescribed;
CS ROLE IN ANNUAL RETURN OF A COMPANY
92. (1) Every company shall prepare a return (hereinafter referred to as the annual
return) in the prescribed form containing the particulars as they stood on the close of the
financial year regarding………
and signed by a director and the company secretary, or where there is no company
secretary, by a company secretary in practice:
Provided that in relation to One Person Company and small company, the annual
return shall be signed by the company secretary, or where there is no company secretary, by
the director of the company.
(2) The annual return, filed by a listed company or, by a company having such paid-up
capital and turnover as may be prescribed, shall be certified by a company secretary in
practice in the prescribed form, stating that the annual return discloses the facts correctly
and adequately and that the company has complied with all the provisions of this Act.
……………………….
……………………
(6) If a company secretary in practice certifies the annual return otherwise than in
conformity with the requirements of this section or the rules made thereunder, he shall be
punishable with fine which shall not be less than fifty thousand rupees but which may
extend to five lakh rupees.
COMPLIANCE WITH
SECRETARIAL STANDARDS OF THE ICSI
118. (1) Every company shall cause minutes of the proceedings of every general
meeting of any class of shareholders or creditors, and every resolution passed by postal
ballot and every meeting of its Board of Directors or of every committee of the Board, to be
prepared and signed in such manner as may be prescribed and kept within thirty days of the
conclusion of every such meeting concerned, or passing of resolution by postal ballot in
books kept for that purpose with their pages consecutively
numbered………………………………………………
(8) Where the minutes have been kept in accordance with sub-section (1) then, until
the contrary is proved, the meeting shall be deemed to have been duly called and held, and
all proceedings thereat to have duly taken place, and the resolutions passed by postal ballot
to have been duly passed and in particular, all appointments of directors, key managerial
personnel, auditors or company secretary in practice, shall be deemed to be valid.
……………………….
…………………….
(10) Every company shall observe secretarial standards with respect to general and
Board meetings specified by the Institute of Company Secretaries of India constituted
under section 3 of the Company Secretaries Act, 1980, and approved as such by the Central
Government.
MANDATORY APPOINTMENT OF COMPANY SECRETARY AS
A KEY MANAGERIAL PERSONNEL
203. (1) Every company belonging to such class or classes of companies as may be
prescribed shall have the following whole-time key managerial personnel,—
(i) managing director, or Chief Executive Officer or manager and in their absence,
a whole-time director;
(ii) company secretary; and
(iii) Chief Financial Officer.
…….
(2) Every whole-time key managerial personnel of a company shall be appointed by
means of a resolution of the Board containing the terms and conditions of the appointment
including the remuneration.
(3) A whole-time key managerial personnel shall not hold office in more than one
company except in its subsidiary company at the same time:
Provided that nothing contained in this sub-section shall disentitle a key
managerial personnel from being a director of any company with the permission of the
Board:
………………………(4) If the office of any whole-time key managerial personnel is vacated, the
resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period
of six months from the date of such vacancy.
SECRETARIAL AUDIT FOR BIGGER COMPANIES
204. (1) Every listed company and a company belonging to other class of companies
as may be prescribed shall annex with its Board’s report made in terms of sub-section (3) of
section 134, a secretarial audit report, given by a company secretary in practice, in such form
as may be prescribed.
(2) It shall be the duty of the company to give all assistance and facilities to the
company secretary in practice, for auditing the secretarial and related records of the
company.
(3) The Board of Directors, in their report made in terms of sub-section (3) of
section 134, shall explain in full any qualification or observation or other remarks made by
the company secretary in practice in his report under sub-section (1).
(4) If a company or any officer of the company or the company secretary in practice,
contravenes the provisions of this section, the company, every officer of the company or the
company secretary in practice, who is in default, shall be punishable with fine which shall not
be less than one lakh rupees but which may extend to five lakh rupees.
FUNCTIONS OF A COMPANY SECRETARY
205. (1) The functions of the company secretary shall include,—
(a) to report to the Board about compliance with the provisions of this Act, the
rules made thereunder and other laws applicable to the company;
(b) to ensure that the company complies with the applicable secretarial standards;
(c) to discharge such other duties as may be prescribed.
Explanation.—For the purpose of this section, the expression “secretarial standards”
means secretarial standards issued by the Institute of Company Secretaries of India
constituted under section 3 of the Company Secretaries Act, 1980 and approved by the Central
Government.
(2) The provisions contained in section 204 and section 205 shall not affect the duties
and functions of the Board of Directors, chairperson, managing director or whole-time
director under this Act, or any other law for the time being in force.
COMPANY SECRETARY IN MERGERS & AMALGAMATION
232. (1) Where an application is made to the Tribunal under section 230 for the
sanctioning of a compromise or an arrangement proposed between a company and any
such persons as are mentioned in that section, and it is shown to the Tribunal—
…………….
…………………….
(7) Every company in relation to which the order is made shall, until the completion
of the scheme, file a statement in such form and within such time as may be prescribed with
the Registrar every year duly certified by a chartered accountant or a cost accountant or a
company secretary in practice indicating whether the scheme is being complied with in
accordance with the orders of the Tribunal or not.
COMPANY SECRETARY AS A TECHNICAL MEMBER OF
NATIONAL COMPANY LAW TRIBUNAL (NCLT)
409 (3) A person shall not be qualified for appointment as a Technical Member unless he—
(a) has, for at least fifteen years been a member of the Indian Corporate Law
Service or Indian Legal Service out of which at least three years shall be in the pay
scale of Joint Secretary to the Government of India or equivalent or above in that
service; or
(b) is, or has been, in practice as a chartered accountant for at least fifteen years;
or
(c) is, or has, been, in practice as a cost accountant for at least fifteen years; or
(d) is, or has been, in practice as a company secretary for at least fifteen years; or
(e) is a person of proven ability, integrity and standing having special knowledge
and experience, of not less than fifteen years, in law, industrial finance, industrial
management or administration, industrial reconstruction, investment, accountancy,
labour matters, or such other disciplines related to management, conduct of affairs,
revival, rehabilitation and winding up of companies; or
(f) is or has been for at least five years, a presiding officer of a Labour Court,
Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947.
HEREAFTER FOR SEC.383A
COMPANY SECRETARY PROVISIONS WILL BE IN
SEC.203, 204 & 205
SEC. 203 – APPOINTMENT
SEC. 204 – SECRETARIAL AUDIT
SEC. 205 – FUNCTIONS OF COMPANY SECRETARY
MAJOR COMPARISON OF PROVISIONS RELATING TO
COMPANY SECRETARY IN COMPANIES ACT, 1956 AND
COMPANIES BILL, 2011
Companies Bill, 2011
Companies Act 1956

Definition of CS in Sec.2 (45)

Definition of PCS in Sec.2(45A)

Appointment dealt in Sec.383A

Appointment limit Rs.5 Cores paid-up capital

Appointment exemption route available

A statutory position

Penalty for non-appointment of secretary Rs.500 per day

No provision for Secretarial Audit

No provision for compliance with Secretarial
Standards of ICSI

Definition of CS in Clause 2 (24) – more simple
and specific

Definition of PCSP in Clause 2 (25) –
Conceptually No change

Appointment dealt in Clause 203 as a Key
Managerial Personnel

“Certain classes” of companies – limit will be
notified in Rules

No exemption route

A more managerial position with statutory
backup

Company – Penalty of Rs.1,00,000 to
Rs.5,00,000; Director & every Key Managerial
Personnel - Penalty of Rs.50,000, and for
continuing offence – Penalty of Rs. 1,000 per
day.

Secretarial Audit mandatory for all listed
companies, and such other companies to be
prescribed (Cl.204)

All companies shall comply with Secretarial
Standards of ICSI relating to Board & General
Meeting (Cl.118(10))
Companies Bill, 2011
Companies Act 1956

Annual Return Signing by a director and a
Secretary, if any. And if there is no secretary
then by two directors.

Annual Return to be signed by a director and
the company secretary, or where there is no
company secretary, by a company secretary in
practice:

Companies having a minimum paid-up capital
and up to Rs.5 cores a Compliance Certificate
from PCS is required.


No express certification in Mergers &
Amalgamation – Compliance with Scheme
Every company in relation to which the order is made
shall, until the completion of the scheme, file a
statement in such form and within such time as may be
prescribed with the Registrar every year duly certified by
a chartered accountant or a cost accountant or a
company secretary in practice indicating whether
the scheme is being complied with in accordance
with the orders of the Tribunal or not.
Concept of Compliance Certificate from
practicing company secretary re-casted in a
new form – clubbed with Annual Return
Certification of a listed company and such
other companies as may be prescribed.
“92 (2) The annual return, filed by a listed
company or, by a company having such paidup capital and turnover as may be prescribed,
shall be certified by a company secretary in
practice in the prescribed form, stating that the
annual return discloses the facts correctly
and adequately and that the company has
complied with all the provisions of this Act.”
ABOUT THE AUTHOR
CS Bilu Balakrishnan, has one decade of experience in
coaching company law matters for CA and CS courses. He is
a speaker for various training sessions, pertaining CA and CS
professions and an active knowledge mentor in social
networks. He is the Founder of Corporate Intelligence
Education & Research (CIER), a Kerala based firm engaged
in corporate laws coaching, developing knowledge portals &
career guidance. Bilu is known as a Corporate laws coaching
expert & Intensive Crash Class Specialist.
He can be reached at
www.facebook.com/csbilub
COMPANY SECRETARIES
IN COMPANIES BILL, 2011
CS. Bilu Balakrishnan
Copyright 2012 Corporate Intelligence Education & Research (CIER)
Presentation Series 01 on New Company Law in India