Listed company- Appointment of company secretary

[CS A Rengarajan]

Dear All
 
Chennai based listed company having paid up capital less than Rs.5 crores taken a view that it does not require whole time company secretary in employment.
 
As  per Section 383A, of Companies Act, 1956, there is no mandatory requirement of appointment of company secretary.having paid up capital less than Rs 5  Crores .
 
Also to note that If the paid up capital is less than 3 crores Corporate Governance will not apply .
 
In India there are 6000 listed companies in various stock exchanges and many companies paid up capital is less than RS 5 crores and also companies having paid up  less than 3 crores.  
 
There are lot of regulatory requirements and  Company secretary to act as a compliance officer .
 
Whether regulatory body i.e SEBI will exempt those companies which are not having paid up capital of Rs.5 crores?
 
Now recently sebi has given permission to BSE and NSE to start SME exchanges,  In general, SME even after raising share capital , the paid up capital will be less than Rs.5 crores in majority of the SME segment.
 
Will SEBI allow those companies not to employ whole time company secretary .
 
We need to have proper guidelines for appointment of company secretaries in listed entities.
 
SEBI should come out appointment mandatory appointment of company secretaries in listed entities considering large scale compliance procedures

 

Section 161 of the companies act speaks about listed company and one this section 161 applies to listed company , why not we have Section 383A of the Companies Act, 1956.

 

Section 161 of the Companies Act, 1956

1) The copy of the annual return filed with the Registrar under section 159 or 160, as the case may be, shall be signed both by a director and by the ¹[***] manager or secretary of the company, or where there is no ¹[***] manager or secretary, by two directors of the company, one of whom shall be the managing director where there is one:

 

²[Provided that where the annual return is filed by a company whose shares are listed on a recognised stock exchange, the copy of such annual return shall also be signed by a secretary in whole-time practice

 

Will Companies bill 2011 resolve the anomalies?

 

It is  debatable point
 
Best regards

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[shankar shankar]

Dear Sir,

Like ICAI, being vigilant on grabbing opportunities to provide for its members, our ICSI should also take effective steps to make understand the need of CS in the Industry and also to grab opportunities for us.

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[Suryah SG]

Also like ICAI has fixed Package slabs for Companies who are recruiting students from the Institute. I'm not sure if ICSI has done something like that..

[CS A Rengarajan]

Thanks for your update i am reproducing the clause 47a

 

Clause 47(a)

·

Appointment of Company Secretary to act as Compliance Officer & will be

responsible for monitoring share transfer process & report to company’s Board

of directors in each meeting

All listed companies shall  comply listing agreement. Moreover whether less than Rs.5 crore or more than Rs.5 corores compliance formalities are remain same. Many companies are taking short cut route whichever is favourable for them, irrespective company law or listing agreement.

 

What will happen if listed entities are not complying listing agreement. members views solicited for non compliance of listing agreement.

 

We request SEBI should take stock of the situation of all listed entities compliance formaliities and ensure good corporate goveranance.

 

Best regards

On Sat, Oct 15, 2011 at 7:47 PM, mittals <a4as...@yahoo.co.in> wrote:

 

Dear Sir,

As per clause 47(a) of Listing Agreement every listed company needs to appoint company secretary to act as a compliance officer hence the view taken  by the chennai based company that since its paid up capital is less then 5 crore hence it is not required to appoint whole time company secretary is incorrect.

Thanks

Regards

Ashish Mittal

---

From: CS A Rengarajan <csaren...@gmail.com>
To: CSMysore <csmy...@googlegroups.com>; cschennai <csch...@googlegroups.com>; charteredsecretaries <CharteredS...@yahoogroups.co.in>; Company_Secretary <company_...@yahoogroups.com>; csfra...@yahoogroups.co.in; lawprofessional <lawprof...@yahoogroups.com>; CACSCWA <CACWAC...@yahoogroups.co.in>; corporate-legal-club <corporate-...@googlegroups.com>; corporate-legal-updates <corporate-l...@googlegroups.com>; company-secretary-vacancies <company-secre...@googlegroups.com>; cssouth <css...@googlegroups.com>; company-secre...@googlegroups.com; CS Students Club <csstude...@gmail.com>; 120thSMTP <120t...@yahoogroups.co.in>; css <cslega...@googlegroups.com>
Sent: Saturday, 15 October 2011 4:27 AM
Subject: [csfratenity] Listed company- Appointment of company secretary

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[kartik shah]

dear sir,

As per section 383A of companies Act, the companies having paid up share capital of more than 10 lakhs but less than 5 crores is required to get compliance cerificate from PCS. and companies having paid-up share capital of 5 crores or more is required to have a whole-time company secretary. so it can be concluded that all companies including SME are complying with provisions of company law via Compliance Certificate.
        I personally think that role of CS must be wide enough to issue certificates of compliance covering all other major acts like Contract Act, competition act, patent, copyright,
trademark, land laws, transfer of property act, environmental laws ...... certificates must be issued separately for complying with such laws.
        We have also seen that CS will be recognised as key managerial personnel (KMP) in companies bill.



Regards,
kartik shah

[CS A Rengarajan]

Dear Sir

 

Please note that SEBI is only amending the listing agreement. I fully agree with your views that the agreement entered into between companies and stock exchanges and monitoring by stock exchanges.. The decision making powers are lying with SEBI inclusion or exclusion of listing clauses.

 

What i have highlighted is policy decisions to be reviewed by SEBI not by stock exchanges

 

On the one hand SEBI insisting good corporate governance and other side listed entities  are taking views which are favourable to them.

 

is it good corporate governance and is it really all listed entities are adopting good corporate governance?

 

MCA has gone further to insist unlisted companies to adopt voluntary corporate governance.

 

We request uniformity with listing agreement and company law provisions.

 

Best regards

 

On Sun, Oct 16, 2011 at 7:37 PM, BIPIN ACHARYA <bipins...@gmail.com> wrote:

 

Dear friends,

It would be pertinently  interesting to know that

[1]  if a company fails to comply with requirements under  section 383A[1] of the Companies Act, 1956, the company and its  officers-in default are punishable with a maximum fine of five hundred rupees per each day of the default ans ha been provided in section 383A[1A]
and
[2]  if a listed company contravenes any provisions under the Listing Agreement { including those under clause 47[a]  for appointing Compliance Officer }, the defaulting person  is punishable with imprisonment for a term up-to ten  years or with a fine upto twenty-five crore rupees  or with  both as has been provided in section 23[2] of  the Securities Contracts         [ Regulation ] Act, 1956.

Stock Exchanges are self-regulatory organisations. Listed companies enter into the Agreement with Stock Exchanges. Monitoring the compliance of the requirements under the Listing Agreement is the function of the Stock Exchanges. The functioning and operations of the Stock Exchanges are monitored by SEBI.
Thus, SEBI does not directly monitor the compliance of the provisions/requirements under the Listing Agreement.

charms,
bipin

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Bipin S. Acharya
Practising Company Secretary
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