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Whole-time Company Secretary In relation to the appointment of a whole-time Company Secretary we have perused section 383A of the Companies

Act (the Act) and the Companies (Appointment and Qualifications of Secretary) Rules 1988, the following has been concluded: As per section 383A of the Act, states that, every Company having a paid-up share capital of Rs. 5 crores is mandatorily required to appoint a whole time secretary who is an Associate fellow member of the ICSI. Further sub-section 1A of 383A states that if a company fails to comply with the provisions of sub-section (1), the company and every officer of the company who is in default, shall be punishable with fine which may extend to 5[five hundred rupees] for every day during which the default continues. With reference to the above, in State of Gujarat v Coromandal Investment P. Ltd. (1991) 71 Com Cases 470 (Guj) the Gujarat High Court held that a person can act as a secretary of a company without becoming its employee. This case though belongs to a period before the Companies Amendment Act 1988. In Sandur Investment Co. Ltd. V. ROC, [(2001) 106 Com Cases 230: 4 Comp LJ 145; (2001) 44 CLA 65 (Kant)] THEW Karnataka High Court held that in case of prosecution the defence can take the pleas that all reasonable efforts were made to appoint a qualified company secretary or that financial position of the company is such that it cannot appoint a secretary. The plea for reasonable efforts can be taken at the trial and not as a ground for quashing the prosecution. With respect to the penalties for offences section 621 of the Act affirms that offences against the Act will be cognizable only on complaint by Registrar, shareholder or Government. In addition according to section 624 of the Act, notwithstanding anything in the Code of Criminal Procedure, 1898 every offence against this Act shall be deemed to be non-cognizable within the meaning of the Code. In relation to the aforementioned, rule 2 of Companies (Appointment and Qualifications of Secretary) Rules 1988, duly lays down that every company having a paid-up capital of not less than 5 crores shall have a whole time secretary. The rules also include the prosecution details for default in appointing secretary. It states that a failure to comply with the rules would make out a prima facie case for trial. In such a case the company may defend itself only at the trial but not use this as a reason to quash proceeding.

Thus taking into account the stated stautes and rules we come to the conclusion that a company having paid-up share capital of Rs. 5 crores or more needs to have a whole-time secretary.