Query on Appointment of company Secretary

[CS AMAR]

Dear All,

Please clarify me on the following two queries:

Query-1 :  I am Company secretary of ABC Pvt Limited having paid up capital of Rs. 9.00 Crores and our company is subsidiary of XYZ Private Limited having paid                 up capital of Rs.15.00 Crores.

               Now, Please Provide your valuable opinion, whether I can be appointed as company secretary in our holding company as well as subsidiary company, if                      yes, what is the procedure to be followed for the above appointment.

Query-2 :  Mr.X is company secretary of  PQR  Limited ( Unlisted closely held Public company)  having paid up capital of Rs. 90.00 Crores and designated as                     KMP of the company. PQR Limited is a subsidiary of EFG Private Limited having paid up capital of Rs. 13.00 Crores.

                Now, Please provide your valuable opinion, whether Mr. X can be appointed as company secretary in PQR Limited and EFG Private Limited at same                       time, if yes, what is the procedure to be followed for the above appointment. 

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Thanking you

CS Amarendra Jena

[Peer Mehboob]

As per Sec.203(3), a whole time KMP can not hold office in more than one company except in its subsidiary company.

Therefore, as per above provision a company secretary of holding company can be appointed as Company Secretary in its subsidiary company.

Further, as per the Report of Company Law Committee inFebruary, 2016, with respect to Sec.203(3), it has been clarified that Sec.13 of General Clauses Act, 1897, provides that "singular" shall include the "plural". Thus a whole time KMP may hold office in more than one subsidiary company as per present law.

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[ACS suresh chaudhary]

Sir, Answer to that is very simple: Whether all the four company are separate Legal Entity or not ? of course they are, Being a Holding or subsidiary does not make them a single entity. 

Can Mr. X become Company secretary in more than one Company? No he/she Cannot.

[Peer Mehboob]

Mr. Suresh, pls refer Sec.203(3). Company Secretary of holding company can be appointed as CS in its Subsidiary company.

[CS AMAR]

Section 203(3) says about whole time KMP. Where as for private Limited company, CA-2013 no where mentioned appointment of KMP. But Rule 8A mentioned Whole time Company Secretary.

Is it require to designate the Whole time Company Secretary as KMP for private Limited Company and then only we appoint him in subsidiary.

8099060605

[Peer Mehboob]

Mr. Amar, Company secretary is a KMP of the company. Pls refer the definition of KMP u/s 2(51). Even if a company is a private limited company, the whole time company secretary will be considered as KMP of the company.

[ACS suresh chaudhary]

Mr. Peer you are right I have not seen that section.

Allowed in a subsidiary company.

I personally think as the number of membership crosses 50,000 ICSI should take an  initiative and get the same amended in future.

On Tuesday, March 14, 2017 at 1:39:03 PM UTC+5:30, Amarendra Jena wrote:

[CS AMAR]

Thanks for clarification.

In Public Company, we are designating Director, CFO and CS as KMP by passing resolution, So is it require to pass Board Resolution for Private Limited Company ?

With regard to Query-2 :  Mr.X is company secretary of  PQR  Limited ( Unlisted closely held Public company)  having paid up capital of Rs. 90.00 Crores and designated as KMP of the company. 

PQR Limited is a subsidiary of EFG Private Limitedhaving paid up capital of             Rs.13.00 Crores.

Now, whether Mr. X can be appointed as company secretary in PQR Limited and EFG Private Limited at same time, if yes, which Section defines about this provision ? Because the CA-2013 says about Holding Co KMP can be KMP of its Subsidiary but no where mentioned about Subsidiary CO KMP can be KMP of Holding Co.

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Thanking you

CS Amarendra Jena

8099060605

[Peer Mehboob]

We dont need to pass resolution to designate CFO, CS, Whole Time directors as KMP. They are themselves due to thier positions are considered as KMP. 

Further, In respect of the query, whether a cs of subsidiary company can be appointed as cs of holding company. I believe both the things are same. And the reason or intention behind this legislature would be that a KMP of holding company or subsidiary company can be also appointed in its holding/subsidiary. In my view, a vice versa of the provision of Sec.203(3) is possible.  

[Ganesan Ramakrishnan]

That is not possible _ a holding co may have many subsidiaries _ implications are Company wise please 

GR

Sent from my BlackBerry 10 smartphone.

From: Peer Mehboob Sent: Tuesday 14 March 2017 5:16 PM To: csmy...@googlegroups.com Reply To: csmy...@googlegroups.com Subject: Re: [CSMysore] Re: Query on Appointment of company Secretary

[Peer Mehboob]

Kindly refer Report of Company Law committee on this issue under sec.203(3).

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[Ganesan Ramakrishnan]

Thanks for quick revert. The Section itself very clear. The word Subsidiary Company is used. Does it suggest that not in many Subsidiaries ? 

Regards 

G R  

Sent from my BlackBerry 10 smartphone.

From: Peer Mehboob Sent: Wednesday 15 March 2017 11:10 AM

To: csmy...@googlegroups.com Reply To: csmy...@googlegroups.com Subject: Re: [CSMysore] Re: Query on Appointment of company Secretary

[Peer Mehboob]

Sir, as I said above. As per Sec.203(3), a whole time KMP can not hold office in more than one company except in its subsidiary company.

And as per the Report of Company Law Committee came in February, 2016, with respect to Sec.203(3), it has been clarified that Sec.13 of General Clauses Act, 1897, provides that "singular" shall include the "plural". Thus a whole time KMP may hold office in more than one subsidiary company as per present law.

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[Ganesan Ramakrishnan]

Thank you Sir ‎.

Company law committee matter is recommended by the Committee and not the final law. Right?  

Regards

G R

Sent from my BlackBerry 10 smartphone.

From: Peer Mehboob Sent: Wednesday 15 March 2017 11:42 AM

To: csmy...@googlegroups.com Reply To: csmy...@googlegroups.com Subject: Re: [CSMysore] Re: Query on Appointment of company Secretary

[Peer Mehboob]

With respect to the provision of Sec.203(3), Company Law Committee has not recommended anything but just clarified and interpreted the provision of Sec.203(3).