Whole time Director cum Company Secretary..Co Act 2013

[Ekta Kathuria]

Dear members,

Section 203 of the Companies Act 2013 and draft rules to it mandate that every company having a paid up capital of RS. 5 crore or more shall have teh following:

1.  WTD/ MD/Manager

2. CS

3. CFO

Question: Can a person be appointed as WTD/MD/Manager and CS  in a company? OR  in other words can a company appoint one person as WTD cum CS to save cost.

Please note that Section 203(3) prescribes that 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

I believe section does not prohibit for the same. what do you suggest on the same 

 Please share your view on this.

Regards
Ekta

[R V Seckar]

Yes.

With the approval of the board

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

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R.V.Seckar

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[sunny dudhani]

No it cant. Though Section doesn't prohibit the same but its its intent is not the same:

1) Both are separate filed of jobs.

2) both are WHOLE TIME in employment.

3) Both cant sign the B/s and AR at same time with same signatures with different designation.

Loophole in law will caught somewhere by authorities in near future

Thanks & Best Regards,-
CS. Sunny Dudhani (B.Com, ACS, LL.B)
Mob. +91-9899307369, +91-9310753834

[Ekta Kathuria]

Thanks for your prompt reply.

In many companies...CS are forced to become WTD cum CS to save cost of the company...specially of defaulting companies.

I think 3 individual people should be appointed for KMP position.

What do you suggest?

Regards
Ekta     

On Thu, Oct 3, 2013 at 12:56 PM, R V Seckar <rvsek...@gmail.com> wrote:

[Ekta Kathuria]

Thanks...Even i believe that Intent of law should be clear in wording in act or rules..

we should make our comments on the same to the authority. 

[R V Seckar]

) Both are separate filed of jobs.

Do you say that a CS cannot act as a director of the company . Many companies have appointed CS as directors in their board. I have been also appointed as a director in one of our company . If CS is a beneficial to a company and if the board appoints , there is no bar for CS to act as both CS and WTD in the company.

2) both are WHOLE TIME in employment.

Why not ? A dual role is fulfilled by appointing CS as WTD

3) Both cant sign the B/s and AR at same time with same signatures with different designation.

CS and another director of a company can sign the BS

[Ekta Kathuria]

Concern is to save CS.... who can be forced to become WTD cum CS in the defaulting companies..or where there are many non compliances.

[sunny dudhani]

With Due Respect

1)Both are separate filed of jobs. 

Separate field of jobs doesn't mean CS cant Act as director. I mean Director cant act as CS even if he is holding the CS degree just for sake of holding the degree doesnt give him a right to act as CS just to avoid cost cutting he cant stake legal compliance of Statue. If Anil Ambani is CS....he will never wanted to act as  CS as well as director for his company since he cant go one on one with dule role since both has got the different direction and different sets of job. he can monitor but cant act.About appointment of CS as Director, if he gets the upwards powers, monetary benefits then only cs is in benefit.

 

2) both are WHOLE TIME in employment.

No doubt about it, but we should be paid for such dule role, but on practical senior we are not. Forget this section. See the compliance of listed companies where independent directors are sweepers of the company.

3) Both cant sign the B/s and AR at same time with same signatures with different designation.

Once again, they can sign as per law. but would it be fair that the annual return of the company is being signed by same person as director and CS. I believe law was made for checking the authenticity of directors by CS. But if this is the situation i doubt about it. and also by Director for CS becoz he knows the crux overall.

All above is on the basis intent of the law not the literal interpretation of law.