COMPANY SECRETARY

The word "Secretary" is derived from the Latin word "Secretarius" meaning Confidential Officer.
A secretary is defined by the Oxford Dictionary as "one whose office is to write for another,
esecially one who is emloyed to cond!ct corresondence, to "ee records and to transact
vario!s other b!sinesses for another erson or for a society, cororation or !blic body".
The Comanies Act #$%&, as amended by the Amendment Act of #$'', defines a secretary as
"any individ!al ossessing the rescribed (!alifications aointed to erform the d!ties which
may be erformed by a Secretary !nder the Act and any other ministerial and administrative
d!ties".
Therefore the Secretary is one of the rincial officers of the comany with the re(!isite
(!alifications to !nderta"e secretarial wor" and management of the affairs of the comany as er
the rovisions of the Act and instr!ctions laid down by the )oard of Directors. The )oard,
however, cannot alter the d!ties of the secretary as they are determined by the law.
TYPES OF SE-CRETARIES
There are vario!s tyes of secretaries, s!ch as *rivate secretary, secretary to a cl!b, cooerative
society, government comany, etc., A brief descrition of these tyes is as follows+
PRIVATE SECRETARY
A rivate secretary is !s!ally aointed by an imortant erson s!ch as a minister in the
government, member of arliament, manager, b!siness magnate or rofessional men li"e
doctors, lawyers, etc, * ,is wor" is to attend to the corresondence and other ersonal wor" or
office wor" of the emloyer. Sometimes, the rivate secretary may also be entr!sted with
certain d!ties of a rivate nat!re s!ch as handling ban"ing transaction, arranging meeting,
arties, and drafting reorts and seeches.
SECRETARY OF A CLUB OR ASSOCIATION
-on.rofit ma"ing associations li"e Charitable instit!tions, c!lt!ral associations and
rofessional association, sorts and athletic cl!bs may aoint a f!ll.time secretary to cond!ct
the day.to.day activities of the association or cl!b. As an honorary secretary cannot generally
be exected to devote his entire time to the wor" of the association or the cl!b, aid
secretaries are aointed.
The imortant f!nctions of the secretary of an association are+
#. The attend to administrative f!nctions s!ch as corresondence, maintenance of
acco!nts and records, s!ervision of staff and arranging for the a!dit of the acco!nts.
/. To cond!ct activities of the cl!b or association s!ch as registration of new members,
collection of fees, etc.
0. To convene meetings of members or exec!tive committees and to reare the
re(!ired doc!ments and min!tes of the meetings.
1. To advise the managing committee on vario!s matters relating to the association and
to exec!te the decisions of the managing committee
SECRETARY OF A CO-OPERATIVE SOCIETY
2enerally, f!ll.time secretaries are aointed in cooerative society. 3n some cases, one of the
members of the managing committee may be elected to act as secretary.
The functins f the secretar! f a c"erati#e sciet! are$
#. To assist the managing committee in managing the affairs of the society.
/. To exec!te the decisions ta"en by the managing committee.
0. To maintain roer records and registers.
1. To arrange meetings and to attend conferences on behalf of the society.
SECRETARY OF A %OVERNMENT &EPARTMENT
4ach deartment of the government is !nder the control of a secretary, e.g., Secretary,
5inance Deartment and Secretary, 4d!cation Deartment. ,e is also exec!tive head and
adviser to the minister who is concerned with that artic!lar deartment.
The d!ties of a government secretary are+
#. Administrative and exec!tive f!nctions s!ch as overall control and day.to.day
administration of the office, g!iding the s!bordinate officers of the deartment,
coordinating the vario!s activities of the deartment as well as the activities of allied
deartment.
/. Advisory f!nctions, which incl!de advising the minister on all matters regarding
decisions and s!lying whatever information is needed by the minister.
SECRETARY OF A LOCAL BO&Y
6s!ally, m!nicial cororations and 7anchayats aoint a aid secretary who will f!nctions as
an office exec!tive. ,e is a lin" between the a!thorities and the staff. ,is f!nctions are many
and varied. ,e has to s!ervise and coordinate all activities of the office, reare b!dgets,
statements, arranging meetings, draft min!tes, etc.,
SECRETARY OF A TRA&E UNION
2enerally, every trade !nion aoints a secretary .,e is a owerf!l erson wielding m!ch
infl!ence over the organi8ed labo!rers. ,e is re(!ired to hold meeting of the !nion, to record
their roceedings, to maintain acco!nts and stat!tory boo"s and to cond!ct the
corresondence on behalf of the !nion. ,e advises the *!nion on vario!s matters connected
with labo!r .3n case of dis!tes, he negotiates with the emloyers on behalf of the labo!r and
ma"es efforts to settle the dis!tes.
COMPANY SECRETARY
The secretary of a comany g!ides the management in the day.to.day wor" of Comany Law
and mercantile law and of acco!nts, taxation, holding of meetings, drafting of reorts.
9esol!tions etc. ,is d!ties are of ministerial and administrative character and he is not
concerned with the directions. control or management of the affairs of the comany. ,e is an
officer of the comany and his d!ties are m!ltifario!s b!t rimarily they consist of d!ties to the
)oard, d!ties to the shareholders and d!ties to the comany. )eca!se of the vast exansion
of :oint stoc" forms of organisation, the osition of secretary has become re.eminent in the
ind!strial and commercial world and has sec!red esteemed osition and a high social stat!s.
Section /;1%< of the comanies Act of #$%&, " A comany secretary is a erson who is a
member of the 3nstit!te of the Comany Secretaries of 3ndia or any other individ!al
ossessing the rescribed (!alifications, aointed to erform the d!ties imosed on him by
the comanies Act, the ministerial or administrative d!ties and managerial f!nctions that are
delegated to him by the )oard"
The Comanies =Amendment> Act #$S%.rovides that a comany can aoint a secretary with
*limited exec!tive* ower of management delegated by the )oard of Directors in addition to his
ro!tine d!ties. 3f the, )oard entr!sts the Secretary with ro!tine d!ties, he is called, .*9o!tine
Secretary*, and if he is entr!sted with limited exec!tive managerial owers, he is called
*4xec!tive Secretary*.
ROUTINE SECRETARY
A Secretary is called a 9o!tine Secretary beca!se his osition can be comared to the
osition of the head of a clerical deartment doing only s!ch wor" as he is directed to do by
the board. A ro!tine secretary is :!st the mo!th.iece of the )oard of Directors. ,e has to do
only what he is directed to do by the directors. ,e does not have any .discretion of his own,
and so, cannot do anything on his own.
The d!ties of a ro!tine secretary relate to+
#. To s!ervise iss!es of shares and debent!res.
/. 9egistration of transfer and transmission of shares
0. Attending to wor" relating to board meetings and general meetings.
1. 7rearing dividend warrants and maintaining the stat!tory and other boo"s of the
comany.
%. 5iling the necessary ret!rn of the comany with the 9egistrar of the comanies
E'ECUTIVESECRETARY
?hen a secretary of a comany, in addition to the erformance of the ro!tine office wor", also
acts as the Chief 4xec!tive Officer of the comany, he becomes an exec!tive secretary .3n
this case, he exercises managerial and administrative owers and erforms many exec!tive
and managerial f!nctions delegated to him by the board. So, he is called an 4xec!tive
secretary.
An exec!tive secretary, besides erforming tile ro!tine office wor" of a secretary, also
erforms a n!mber of other resonsible :obs. The other imortant d!ties of an exec!tive
secretary are+
#. To Organise and Control the whole office.
/. To carry on the corresondence wor" relating to the vario!s deartments of the
Comany.
0. To attend to all matters relating to the Cost and comany acco!nts.
1. To negotiate contracts with third arties on behalf of the Comany.
%. To act as a Liaison officer, i.e., 4stablishing lin"s between the comany and o!tsiders.
&. To act as an adviser and g!ide to the board of directors on all imortant matters of
olicy and administration.
APPOINTMENT OF A COMPANY SECRETARY
As er the 3ndian Comanies Act, #$%&, it was not com!lsory for comanies to aoint a
secretary. ,owever, in ractice all comanies aointed secretaries. As er 9!le /;#< of
Comanies =Aointment and @!alification of Secretary ;Amendment<> 9!les. #$$0 it is obligatory
for a comany having a aid.! caital of not less than 9s. %A La"hs to aoint a whole.time
secretary. As er 9!le /;#< above for comanies having aid.! caital of less than 9s. %A la"hs it
is not obligatory to aoint a whole.time secretary .5!rther, when the board of directors of any
s!ch comany comrises only two directors, neither of them shall be secretary of the comany.
The Act also states that no individ!al can hold the office *of *secretary in more than one s!ch
comany. 5!rther, only a individ!al ossessing s!ch (!alifications as the central 2overnment may
rescribe can be aointed as secretary of a comany. -ow, a comany having aid.! caital of
9s. / crores m!st have a whole time secretary. =This came into force from ##th B!ne /AA/>.
The romoters of the comany generally first aointment a secretary who assists them in he
formation of the comany by attending to all reliminary wor" s!ch as rearation of vario!s
doc!ments and statements re(!ired for registering the comany, arranging the meetings of the
romoters, rearation of min!tes, etc,. ,e is often referred to as Protem Secretary ;i.e.
secretary for the time being< and his name may be incl!ded in the Articles of Association of the
Comany. 3f the board of directors decides to aoint another erson as secretary other then the
Protem Secretary after incororation of the comany, the first secretary who is aointment by
the romoters cannot s!e the comany. ,owever, he sho!ld be given roer notice in s!ch a
case, otherwise, he can s!e the comany for damages. ,ence, to sec!re his osition, the first
secretary who has been acting, as Protem Secretary m!st, immediately after the incororation,
get his aointment confirmed by a resol!tion at the first board meeting.
The roced!re for aointing a comany secretary .other than the first secretary .is as follows+
#. A resol!tion has be assed at the board of directors* meeting aointing a secretary on
certain terms and conditions.
/. The artic!lars of aointment m!st be filed ill d!licate with the 9egistrar within 0A days
of the aointment.
0. 3 the erson aointed as secretary f!nctions as secretary in any other comany, he to
notify the other comany within /A days of his aointment.
1. Any director interested in the aointment of secretary m!st disclose his intent and m!st
not ta"e art in the disc!ssion or voting on the resol!tion.
%. 3f the erson aointed, as secretary is the director of a comany or is a relative of a
director, a secial resol!tion h.as to be assed in the general board meeting for s!ch an
aointment.
The following ersons are !s!ally not (!alified for aointment as the secretary in a !blic
limited comany+
#. A director of a comany
/. The a!ditor of the comany
0. Any other erson who is not eligible to enter into a contract.
The reasons for dis(!alifying the above ersons are that the ost of a secretary is deemed to
be a ost of rofit and the comanies Act #$%& sti!lates that no director can hold any lace
of rofit. )!t by obtaining the consent of a comany by assigning a secial resol!tion a
director can be aointed as a secretary. 3t sho!ld, however, be noted that in case a director is
aointed as a secretary, he cannot contin!e as a director.
As regards a!ditor as a secretary of a comany, the Act states that no emloyee of a
comany can act as a!ditor. As s!ch we find that a secretary is an emloyee of a comany
and therefore, a erson cannot be aointed both as a secretary and as a!ditor of a comany.
&UTIES AN& FUNCTIONS OF COMPANY SECRETARY
The d!ties of .a secretary vary from comany to comany, deending !on the nat!re on the
b!siness, si8e of the comany and the owers en:oyed by and resonsibilities entr!sted with the
secretary.
The d!ties of a comany secretary may be classified !nder the following broad heads+
#. Stat!tory d!ties
/. 2eneral D!ties
a. D!ties in relation to directors
b. D!ties in relation to shareholders
c. D!ties towards organisation and office
d. D!ties in relation to the !blic
() STATUTORY &UTIES
The stat!tory d!ties of a comany secretary are those rescribed by the Comanies Act or by
any other legislation s!ch as the 3ncome Tax Act, Sales tax Act, Stam Act, 4mloyee state.
3ns!rance Act, 3nd!strial Dis!tes Acts, Contract Act, Conoolies and 9estrictive Trade
7ractices Act, etc,
The most imortant art of his stat!tory d!ties relates to the vario!s rovisions of the
Comanies Act are+
#. Caintenance of boo"s and registers of the comany
/. 5iling of the necessary ret!rns with the 9egistrar of Comanies
0. S!ervising the iss!e, allotment, transfer and forfeit!re of share and debent!res.
1. Attending to meetings and recording their roceedings.
%. Safe C!stody and roer !se of the common seal of the comany.
The 3ncome.tax Act re(!ires him to ta"e stes for the ded!ction of income tax
from dividends, interest and salary and its ayment to the tax a!thorities.
6nder the Stam Act, he has to see that stams of the re(!isite amo!nt are
affixed to doc!ments, shares etc.,
6nder the Sales.tax Act, he has to arrange for timely s!bmission of ret!rns and
ayment of tax. 3n addition, he has to comly with the rovisions of any other
.Act, which is alicable to that artic!lar comany. 5or instance, a
man!fact!ring comany has to comly with the rovisions of the 5actories Act,
the 3nd!strial Dis!tes Act, Cinim!m ?ages Act and other ind!strial laws. The
secretary has to see that these rovisions are comlied with.
A comany secretary is not only a servant of the comany b!t also a servant of
the law.
*) %ENERAL &UTIES
&uties in Re+atin t &irectrs$
The Secretary has to loo" after the corresondence with the director, convene board
meetings !nder the direction, of the managing director, reare min!tes and exec!te the
orders and instr!ction of the board. ,e has to advise the directors d!ring the deliberations
at the meeting regarding the rovisions of vario!s Acts. ,e acts as a g!ide to the board of
directors.
The secretary is the confidential cler" of the board. ?hile the directors lay down the broad
olicies of the comany at board meetings, the secretary interrets these olicies. ,e
comm!nicates board decisions to the staff and shareholders and beca!se of this, he is
called the mo!thiece of the board of directors. 5!rther, the secretary has to "ee the
board osted with all develoments relating to the activities of the comany. As the
secretary is the agent of the board of directors, he m!st carry o!t their instr!ctions. 3n
addition he "ees the common seal of the comany and !ses it as directed by the board.
&uties in Re+atin t Shareh+,ers)
The secretary is also medi!m of comm!nication between the comany and shareholders.
.As the shareholders are the owners of the comany, the secretary has to safeg!ard their
interest and sho!ld attend to their en(!ires regarding ayment of dividend, iss!es of
share, etc., 3n dealing with shareholders the secretary has to be very tactf!l and, at the
same time, be co!rteo!s, friendly and helf!l. ,e has to ens!re that no confidential
information of the comany is made available to a section of the members, which may
affect the interest of the comany as a whole. . 5!rther, he has to organi8e and s!ervise
corresondence with shareholders with regard to the following+
#. Alication and allotment of shares.
/. Calls of shares.
0. 5orfeit!re of shares.
1. Transfer and transmission of shares.
%. Distrib!tion of dividend
&. -otice and circ!lars to .members
D. Ceetings of shareholders
'. 3n(!iries and comlaints from shareholders.
Misce++aneus r ther &uties$
The other d!ties of a comany secretary are+
#. ,e sho!ld not act witho!t a!thority
/. ,e sho!ld discharge his d!ties honestly
0. ,e sho!ld 4xercise reasonable care E diligence
1. ,e sho!ld Act in E emergency very ca!tio!sly in the interest of the comany
%. ,e sho!ld not lea" o!t the secrets or confidential matters of the comany either to
the share holders or to the 7!blic.
&. ,e sho!ld reresent the comany on social f!nctions.
&uties t-ar,s Or.ani/atin an, Office)
The secretary is generally recogni8ed as the head of the office of the comany and has
control over deartments s!ch as shares, record and filing, acco!nts and statistics. ,e has
to ens!re that the office wor"s with maxim!m efficiency. ,e has to s!ervise vario!s
activities of the office and also coordinate the activities of the different deartments. 3n
order to get the best o!t of the staff, he has the overall d!ty to select, organi8e and g!ide
ersonnel. This re(!ires that he sho!ld devote artic!lar attention to the terms and
conditions of their service and also maintain ersonal contact with individ!al members of
the staff.
&uties in Re+atin t the Pu0+ic)
The secretary being in ossession of all.imortant information abo!t the vario!s asects of
the comany has to f!nction as a medi!m of comm!nication between the directors and the
general !blic consisting of debent!re holders, ban"ers, solicitors, creditors and the
*rosective investors. ,e has to be in to!ch with them and rovide information that may
be as"ed for. At the same time, he sho!ld ta"e care to see that no confidential information
is div!lged to the !blic. 5!rther, he sho!ld f!nction as liaison officer between the
shareholders and the directors, the comany and the o!tsiders and sho!ld discharge his
d!ties in the best interest of the comany.
1UALIFICATIONS OF T2E SECRETARY
3n the case of comanies with a aid.! share caital of less than 9s. / crores any individ!al
ossessing any go the following (!alifications may be aointed as *its whole.time secretary to
erform of d!ties of secretary.
;3< Cembershi of the 3nstit!te of Comany secretary of 3ndia ;3CST<.
;33< 7ass in the intermediate examination cond!cted by the 3nstit!te of Comany Secretary in
3ndia ;3CS3<.
;333< 7ost.2rad!ate degree in commerce or cororate secretaryshi awarded by any !niversity in
3ndia.
;3F< Degree in Law awarded by any !niversity.
;F< Cembershi of the 3nstit!te of Cost and. ?or"s Acco!ntants of 3ndia.
;F3< Cembershi of the 3nstit!te of Chartered Acco!ntants of 3ndia.
;F33< 7ost.grad!ate in Comany Law and Secretarial 7ractice granted by the 6niversity of
6dai!r.
;F333< Cembershi of the Association of Secretaries and Canager, Calc!tta.
;3G< Diloma in Cororate Laws and Canagement granted by the 3ndia Law 3nstit!te, -ew Delhi.
;G< 7ost.grad!ate degree or diloma in Canagement Sciences granted by any 6niversity.
;G3< 7ost.grad!ate degree or diloma granted by 3ndian 3nstit!tes of Canagement, )angalore,
Calc!tta, L!c"now, Ahmedabad or Calic!t.
The (!alifications ossessed by a erson holding the office as the secretary of a comany
immediately before 0Athe October #$'A shall be deemed to be the (!alification, which he shall he
re(!ired to ossess in order to be eligible to contin!e in that comany.
The Comany ;Secretary (!alification< 9!les stated above, do not aly to a limited comany
which is formed for the romotion of commerce, arts and science, religion, charity etc,. and which
ma"es riority ayment of dividends to its members ;i.e. a comany to which a license is granted
!nder Section /% of the Comanies Act<.
1UALITIES OF T2E COMPANY SECRETARY$
3n addition to the stat!tory (!alifications, a comany secretary sho!ld ossess certain other
(!alities if he is to discharge his m!ltifario!s d!ties efficiently. The (!alities are+
Sun, %enera+ E,ucatin$ A so!nd general ed!cation hels the secretary in grasing the
s!b:ect witho!t ta"ing m!ch of his time and effort.
C33an, #er Lan.ua.es$ As a large art of the secretary*s wor" consists of
corresondence and rearation of reort and rHcis, it is necessary that he sho!ld have a
command over lang!age. 5!rther, he sho!ld also be conversant with certain seciali8ed
b!siness terms and exressions s!ited to his wor". 3f his comany has foreign connections, it
is better for him to have a "nowledge of one or two foreign lang!ages.
4n-+e,.e f Office A,3inistratin$ 5or the efficient organisation of the office, the
secretary sho!ld "now the best system of filing and indexing and sho!ld have a "nowledge of
labo!r saving devices, recr!itment of office staff, methods of rem!neration, delegation of wor"
etc.,
4n-+e,.e f Accuntin. an, Ta5atin$ As comany secretary is an exec!tive office of the
comany, he m!st also have a basic "nowledge of the rinciles of acco!nting and taxation,
consisting of income tax and sales tax.
4n-+e,.e f C3"an! La-$ A thoro!gh "nowledge of the vario!s rovisions of the
Comanies, Act is essential for the secretary .Comanies have to f!nction within the legal
framewor" of the comanies Act, hence a thoro!gh "nowledge of .the vario!s rovisions of
Comanies Act is essential for a secretary.
4n-+e,.e f #arius acts Re+atin. t Staff$ 5or the efficient handling of staff, the
secretary sho!ld have thoro!gh "nowledge of vario!s acts of legislation which are alicable
to the staff, vi8., the 5actories Act, the 3nd!strial Dis!tes Act, the ?or"men*s Comensation
Act, the 4mloyees* 7rovident 5!nd Act, the 7ayment of ?ages Act, 3ncome Tax Act, etc.
4n-+e,.e f Mercanti+e La-$ Aart from the "nowledge of the law relating to staff, a
wor"ing "nowledge of the laws relating to contracts, negotiable instr!ments, sale of goods,
ins!rance etc, may be of immense hel to the secretary in discharging his d!ties.
4n-+e,.e f the In,ustr!$ ,e sho!ld have a thoro!gh "nowledge of the b!siness of his
comany and "nowledge of the ind!stry in which his comany is engaged. This wo!ld hel
him to give roer g!idance to the chairmen and the board on vario!s intricacies of b!siness.
%enera+ 4n-+e,.e$ 2eneral Inowledge hels the secretary in g!iding the chairman and
board of directors, and in erforming his d!ties confidently. ,ence, aart from "nowledge of
the ind!stry, the secretary sho!ld have general "nowledge li"es c!rrent haenings,
economic conditions, olitical and social condition, mar"et conditions, etc.
I3"ressi#e "ersna+it!$ The vario!s (!alifications and (!alities mentioned above are essential,
b!t not s!fficient. )esides these, for a comany secretary to be s!ccessf!l exec!tive, he m!st
have a good ersonality which is a comrehensive term consisting of so many ersonal virt!es
and talents s!ch as charming manners, organi8ing ability, imagination, initiative, strong common
sense, originality, efficiency arid intelligence, a sense of resonsibility, alertness, self.disciline,
foresight, ind!strio!sness, co!rtesy and high moral character .
Ri.hts
The rights of a comany secretary mostly flow o!t of his service agreement with the comany.
These may be s!mmari8ed as follows+
#. 9ight to s!ervise the secretarial deartment. )eing head of the secretarial deartment,
he has the right to control and s!ervise the activities of the deartment !nder his control
/. 9ight to sign doc!ments. As a rincial officer within the meaning of the Comanies Act,
he has to sign doc!ments re(!iring a!thentication of the comany
0. 9ight to claim rem!neration. The secretary is a servant ;emloyee< of the comany and
has a right to claim his salary d!ring its lifetime. )efore his services are terminated, he can
demand a reasonable notice and claim damages for his wrongf!l dismissal. 3n the event of
the winding ! of the comany he can claim his o!tstanding salary as a referential
creditor
)!t the secretary has no right to+
#. Ca"e allotment, or register transfer, of shares of the comany !nless he is secifically
a!thorised by the directors in that behalf and the Articles of the comany allow the
directors to delegate this ower to the secretary
/. Ca"e any reresentation on behalf of the comany or to enter into any contracts witho!t
exress a!thority and consent of the directorsJ
0. )orrow in the name of the comany
LIABILITIES OF T2E SECRETARY
The liabilities of the comany secretary may be divided into two categories+
a< Stat!tory liabilities
b< Contract!al liabilities
a6 Statutr! Lia0i+ities
As the rincial exec!tive officer of the comany, the secretary has certain stat!tory
obligations !nder the .Comanies Act, 3ncome tax Act and the Stam Act, Sales .tax Act
etc. 3f the secretary fails to carry o!t the stat!tory obligations or d!ties imosed on him by
the vario!s acts, certain liabilities are imosed on him by the Comanies Act and other
acts. S!ch liabilities are called the Stat!tory liabilities. 3n short, stat!tory liabilities refer to
all those liabilities imosed on the secretary by the Comanies Act and other acts for his
fail!re to discharge his stat!tory d!ties.
The vario!s stat!tory liabilities imosed on the comany secretary are+
#. 3f he fails to hold a stat!tory meeting.
/. 3f he does not circ!late the stat!tory reort.
0. 3f he fails to hold the Ann!al 2eneral Ceeting.
1. 3f he fails to s!bmit to the 9egistrar of Comanies coies of ann!al acco!nts and other
statements.
%. 3f he fails to give notice of )oard Ceeting.
&. 3f he fails to record the min!tes of )oard and 2eneral Ceeting.
D. 3f he does not maintain min!te boo"s at the registered office.
'. 3f he ref!ses to allow insection of min!tes by the members.
$. 3f he ref!ses to f!rnish coies of Cin!tes to members.
#A. 3f he fails in ma"ing ready share certificates and debent!re certificates within the
sti!lated eriod.
##. 3f he fails to maintain a register of directors, shareholders and debent!re holders.
#/. 3f he fails to comly with the rovisions of the Act regarding the aointment of a!ditors
and the a!ditor*s reort.
#0. 3f he fails to rectify the mista"e within a eriod of two months, in case the comany has
been registered by a name which is identical with or too closely resembles the name of
an existing comany.
#1. 3f he fails in filing ?ith the 9egistrar of the Comanies relevant doc!ments as re(!ired
by the Act.
#%. 3f he fails in registering the resol!tions etc, as re(!ired.
#&. 3f he fails to have the name of the comany engraved on the seals, etc.
#D. 3f he fails to ma"e entries in the member*s register on the iss!e of share warrants.
#'. 3f he fails to comly with the rovisions of this Act artic!larly regarding the
aointment of a!ditor, a!dit reorts, etc.
#$. 6nder the 3ncome Tax Act, #$&# the comany secretary is resonsible for collection
and ayment of income tax.
/A. 6nder the 3ndian Stam Act, the comany secretary is resonsible for verifying the
correctness of doc!ments needing stams, etc.
06 Cntractua+ Lia0i+ities
Aart from the stat!tory liabilities, the comany secretary has certain liabilities to the
comany arising o!t of his contract of service with the comany. These liabilities are
"nown as contract!al liabilities.
#. ,e m!st carry o!t the orders given to him by the directors.
/. ,e m!st carry o!t the obligations of his service agreement with the comany.
0. ,e sho!ld not disclose any confidential information of the comany.
1. ,e sho!ld not do anything beyond his a!thority. 3f he acts beyond his a!thority, he
will be held ersonally liable for any damage or loss s!ffered by the comany or
any third arty as a res!lt of his action.
%. ,e is exected to erform his d!ties .with reasonable care and s"ill.
&. ,e is liable for damages ca!sed to the comany by his wilf!l miscond!ct and
neglect of d!ties.
D. ,e is liable for any fra!d on the art of any of his assistants if it is roved that he is
a a3#y to s!ch fra!d.
LE%AL POSITION OF T2E SECRETARY
The Comanies Act has recognised the secretary as the rincial officer of the comany and he is
resonsible for the secretarial and other !rely ministerial and administrative wor" of the
comany. ,e has to file vario!s ret!rns and statements with the 9egistrar of Comanies as er
the re(!irements of the Comanies Act. 3n case he fails to f!lfil these stat!tory obligations, he will
be held liable for s!ch defa!lts.
3n the eyes of law, the secretar! is a 3ere ser#ant f the c3"an!) ,e has to act in
accordance with the order or directions of the board of directors. ?itho!t a!thority, he cannot
enter into any contract with the third arties and cannot ma"e any reresentation on behalf of the
comany. ,e is aointed by the board and derives his a!thority from the board. ,e is !nder the
control of the board of directors and he has to carry o!t the orders of the board and cannot
exercise indeendent discretion in the wor" for which he is resonsible. Th!s, the secretary is a
mere servant and s!bordinate officer of the comany witho!t any managerial f!nction.
ACTUAL POSITION OR STATUS OF A COMPANY SECRET
The act!al osition of a comany secretary is not merely that of a servant or an agent, b!t
something more than that. 3n act!al ractice, a comany secretary occ!ies a osition of
imortance in the administrative set-up of the comany. ,e is not a mere tool in tl#e hands of the
board of directors or the mo!th iece of the directors carrying o!t the orders of the directors. 3n
the comany set !, both the board of directors and the+ secretary lay .a comlementary role to
each other. The board of directors is resonsible for the overall management of the comany*s
b!siness. 3t lans, decides and form!lates the olicies of the comany. )!t the resonsibility of
the act!al exec!tion of the olicies lies with the comany secretary .3t is the secretary who carries
o!t the orders of the board of directors. That is why, it has been rightly remar"ed that while the
directors are the brain of the comany, the secretary is its eyes, ears and hands of the comany.
The comany secretary is in close to!ch with the wor" of the board and has access to the
confidential matters of the comany. ,e exercises his discretion in most matters relating to the
ro!tine affairs of the comany. Similarly, in matters relating to staff, shareholders and. o!tsiders,
generally, the secretary is allowed .to exercise his discretionary ower. This ower of discretion is
given to the board beca!se the directors may not be in a osition to devote their time for ta"ing
decisions relating to matters which are of a ro!tine nat!re. ,e is often cons!lted by the chairman
and the board before ta"ing any decision on olicy matters or on any other imortant matter since
he, has an intimate "nowledge of the comany and is in constant to!ch with the staff, the
shareholders and the !blic. ,e is in a better osition to advise the board on vario!s matters
relating to the f!nctioning of the comany. 5!rther, as he ossess a thoro!gh "nowledge of the
vario!s legislative enactments relating to comanies, he is cons!lted by the board on vario!s
legal matters.
The comany secretary acts in different caacities and discharges many d!ties and
resonsibilities. They are+
#. ,e acts as the agent of the board of directors and carries o!t the instr!ctions of the board
of directors.
/. ,e acts as the registrar of the comany and attends to the secretarial f!nctions, s!ch as
the filing of vario!s ret!rns and statements with the registrar of comanies, registration of
transfers and transmission of shares and the wor" of corresondence.
0. ,e serves as the b!siness exec!tive of the comany and carries o!t the ro!tine office
wor" and also the managerial d!ties entr!sted to him by the board.
1. ,e acts as an adviser and advises the directors and the chairman on imortant matters
affecting the b!siness of the comany.
%. ,e acts as a liaison officer between the board of directors on the one side and the staff,
shareholders and the general !blic on the other side.
&. ,e acts as a confidential officer and ens!res that the confidential matters of the comany
are not lea"ed o!t.
D. ,e is also re(!ired to act as a !blic relations officer of the comany and imrove the
image of the comany in the minds of the !blic.
REMOVAL OR &ISMISSAL OF A COMPANY SECRETARY
The Secretary may be removed from office by the board of directors, !nder the ower exressly
given in the articles or !nder their general owers which the articles generally give them. A
secretary being a servant of the comany, his s!sension and dismissal are governed by the
normal law alicable to emloyer and emloyee. The services of a secretary may be terminated
by giving him notice as er the terms of the service agreement. 3f an agreement does not mention
any secific eriod of notice, reasonable notice m!st be given.
The services of the secretary may be terminated witho!t notice if he ma"es rofits secretly. ,e
may be dismissed for willf!l disobedience, miscond!ct, negligence, fra!dJ dishonesty, and
ermanent disability .The aointment of a receiver or manager in a debent!re holder*s action
;s!it< against the comany, or ma"ing of an order by the co!rt for com!lsory winding ! of the
comany will oerate as a termination of the services of the secretary.