The Company Secretary And Necessity Of Hiring One
- The position of Company secretary comes with a lot of responsibilities. The companies must appoint a Company secretary as the laws laid down have obligated the company to. However, the name of the job might sound like a clerical responsibility, but the reality is far different. The Company Secretary is required in both the public and the private sector. The position is a high-level position, demanding a wide range of duties. To become a Company secretary, one needs to undergo courses and clear exams to be eligible to take up the role of the Company secretary.
- The Company secretary is a crucial responsibility and takes up a lot of things on their front, ranging from legal to administrative, to maintaining books and keeping documents, to regulating and facilitating a healthy governance practice.
A Company Secretary is a position where the individual is required to oversee the legal front and compliance of an enterprise or an individual. The position requires one to take care of tax filing, auditing, advising the company regarding their legal obligation and finances. They are also expected to keep an oversight on the company to make sure the functioning is within the restricted legal framework of the laws laid down by the government.
However, the role assumes a vast amount of responsibilities and requires the individual to be proficient and organized at planning, communication, and an adequate understanding of business and finances.
A Company secretary’s formal responsibilities and obligations
The duties of the Company secretary regarding the companies act are to carry out authentication of the documents and registrations, which also includes the delivery of the registration to the registrar. Make sure that the company complies and files annual returns. Managing a record of making and delivering the share certificates while also keeping the records of the share warrant holders. Doing the due process to get a commencement certificate. The Company Secretary is also expected to maintain books with up-to-date record keeping. They are expected to sign and validate the financial reports. They get 30 days to prepare minutes from the general board meetings.
The responsibility of the Company Secretary as per the income tax act is that they are supposed to make sure the proper TDS (tax deduction at source) is being taken away from employees' salaries. They are also expected to look after keeping the TDS reports maintained and ensuring the company is submitting the TDS to the government.
The responsibility also expects the Company secretary to make sure the company complies with the regulatory happenings and be obligated by some basic laws such as labor laws, environmental laws, etc. The role also takes up the responsibility of getting approval from the government.
The Company secretary is expected to safekeeping and maintains a statutory register which consists of the register of the board members, the register of charges, the register of allotments, register of minutes in the meetings and resolution, register of Director's interest, register of secretaries; register of directors' interests; register of debenture holders; service contracts of directors; directors' indemnities; minutes of meetings and resolutions; Documents of purchase or redemption shares out of the capital by a private company; Report consisting of a company into interests in its own shares to be given to the members.
The responsibility also expects the Company secretary to expand and grow the company at a global and regional level depending on the company's ideals. They are also expected to pay attention to venture or joint ventures for the organization to profit off of and assist and attend to the collaboration and takeovers.
While taking care of other things, the Company Secretary is also expected to manage and facilitate all sorts of meetings and take minutes from them. Analyzing and rejuvenating the ideas and giving legal input are expected from the company secretary.
The changing responsibility of a Company secretary in today's world
The responsibility of a Company secretary can widen as required by the company. The responsibility for a Company secretary ranges from overseeing the legal front to managing some of the administrative parts and looking after other potential responsibilities. The Company secretary becomes a linking bridge for information, communication, guidance between the board and the management, the company, shareholders, and stakeholders.
The boardrooms are changing the dynamics of the meetings, affecting the responsibilities of the Company secretary. The role of the Company secretary now seeks someone who can advise the chairperson and the board members regarding the decisions, and assist them with their expertise and knowledge on the subject, while also informing them about the ramifications of the wrong decisions.
With the evolving and changing role of the Company Secretary, the responsibility also comes with laying down and implementing practices to sustain healthy governance of the organization. The Company secretary is expected to ensure organizational governance. They are required to lay down a formal structure for the organization to which they can adhere to best practices. The structure should adhere to the set regulations and legislations while also making the design efficient and workable for the company.
The Company secretary also assumes the role of advising the chairman and board members for the strategic planning for the organization. The Company secretary's communication with the chairman is expected to be transparent and effective, which helps pave the way to a healthy working structure. The Company secretary also helps the Chairman and the board add to the framework by timely analyzing the framework, adding or amending practices, and following up on the development of the amended or changed things. The role also expects to seek a good working relationship with the board members for a good integrated working of the company.
The Company secretary doesn't only help the chairman with advising and becomes a forefront for maintaining good governance by making sure the board obliges to the regulated and decided practices. The Company secretary is expected to work in the interest of the organization. Their advice and services should be retrievable for all the board of directors and should be impartial. The role also assumes analyzing the board members and timely informing and evaluating the working with the oversight of the chairman. Informing and indicting new board members and overseeing smooth transitions.
The distance between the board and the management is also expected to be shortened with the presence of a Company secretary. The Company Secretary plays a pivotal role in holding the management accountable and ensuring the output goals are set and what the board expects from the management. The external stakeholders, who are the investors, are also informed and addressed by the Company secretary. They can come to the Company secretary for their queries to be resolved or addressed.
The responsibility of the Company Secretary is also to advise the board of directors in regards to risk management, business practices, and planning, carving and rising brand and image while also clinging on to the legal restriction and adhering to the legal responsibilities of the company.
The underrated yet important part of the assumed role of the Company secretary is scheduling meetings and keeping track of the minutes of the meetings among the board and chairman. However, this might sound like a clerical job. Still, it is one of the most important parts of the job as it paves the way to keeping and re-assessing the board's mindset while also scrutinizing the validity of legal understanding.
The Company secretary is expected to safekeeping and maintains company records, including PAYE information, VAT registration, tax and accountancy records, pension, and insurance details.
The less talked about Roles which fall under a Company secretary
The company secretary is expected to make sure the policies laid down by the board and chairman are being implemented with the same mindset as the company requires. The Company Secretary also acts as a person of contact and debriefing and having a dialogue between the chairperson and board and the management and stakeholders. They are expected to be the communication channel between the chairperson and the board, auditors, staff personnel, trade unions. At the same time, externally, they are also the communication channel and facilitator for the company's auditors and trade unions.
They are to make sure that the company complies with the regulations and policies laid down. They are expected to play a pivotal role by making a concise information directory from all company departments and corroborating it into reform and amending the current policies. By informing the board and chairman with the right information to come to a consensus over what the right decision to be taken should be. The Company secretary oversees everything about the company and hence can help culminate the strengths and weaknesses by influencing some advice to the board and the chairperson.
The Company Secretary ensures the company is complying with the standard governance. They can also assist the Audit Committee. If there is a query or problem in matters pertaining to governance or problems with the investors, the Company secretary can also assume responsibility as a grievance redressal person.
Formal powers and Restrictions for the Company secretary
Due to the legal obligation, the Company secretary is bound and accountable for any negligence shown from their end towards the company. If any discrepancies are observed because of the Company secretary, they can immediately be relieved of their responsibility. They are legally bound to the safekeeping of the secrets from the outsiders; in view of any breaches, they can be relieved of their responsibilities. The Company secretary can't go over someone's head and make decisions, they have to stay within the limits of their role, and if any discrepancies are observed, they are liable for it. The Company secretary cannot lend and borrow money and cannot make changes to share, including registering, without the board's approval. They do not have the authority to sign contracts without getting a nod from the chairman of the board.
Why the role of the Company secretary is important in any business enterprise
The Company Secretary is one of the most important people for any company and plays a pivotal role in shaping a company from the ground up. The role assumes many responsibilities, and any negligence can or may lead up to ramifications. The company's working structure and healthy governance are decided with the advisory of the Company secretary. The administrative oversight by the Company secretary results in finding problems and issues pertaining to the working or the governance of the organization. The advisory of the Company secretary largely influences the discerning and meticulous decisions taken by the board and chairman.
The federal and democratic structure among the company can only be sought through a Company secretary. Maintaining healthy communication among the board and the chairperson is only possible through a Company secretary. The Company secretary also bridges the distance between the board and management, which helps keep oversight of problems and solutions. It would be an understatement that the communication skills of the Company secretary play the most pivotal role in taking the conversation and dialogues forward in the healthiest way possible.
The Company secretary takes care of administrative practices with the help of legal experience and oversees and comes up with a design to keep the functioning of the company working. The importance of the Company secretary is undeniable, and their expertise and experience serve in maintaining books, keeping a careful eye on the discrepancy and irregularities of the company's books. While they make sure the federal structure of the company is intact, they also look over the investor's queries and fulfill the needs as per the requirement.
A company is highly dependent on its Company secretary for maintaining a lot of important information while also being a guiding and influential force for making policies and practices. The changing role of a Company secretary in the 21st century has bestowed light on the interdisciplinary work they perform to make the company function. In all fairness, it would be right to say that the Company secretary acts as a spine for the company. The need for a Company secretary is indispensable.
Promoting and extending the clientele
These days, the Company secretary firms can offer their services to not just one but multiple business enterprises and groups. The idea of expansion is to get more clientele into their firm and become a legitimate service firm for further expansion.
Attracting clients from bigger business groups might be tough considering the level of competition, but access to the internet has given a plain field for optical advancement. The Company secretary firm can start a website and explain the services they offer, their expertise and the previous business groups they have worked with. This new form of optics helps in growing and expanding the firm and paves the way for creating a brand image in the future for the following. Having a Company secretary website will help collaborate and have a central database for the client company. This might also help in the expansion of the company and the firm.
The growing need for company secretaries
As the business empires and start-ups are rising, the requirements for a Company secretary are also booming. The multidisciplinary advisory and assistance of the Company secretary come in handy in due time. The Company secretary becomes necessary as the higher section of the company is looking after and making sure the day-to-day work is being done with due diligence.
There is an influx in the requirement for a Company secretary, which also comes with an adequate salary package. As the job responsibilities evolve with time, the youth are very ambitious to partake and be open to the change. This is promoting more job opportunities for a lot of people.
How to help the Company secretary to work to the best of their abilities
To conclude the discourse about how we can make it easier for the Company secretary to work without hindering them from working the best of if their abilities are by making sure that he is only answerable to one person who can be a chairman or a senior board member as accountability by multiple people can hinder with the output of the company's decision making. While it is important for him to do his job, the respect for him by the board members and the managerial staff should not create a bias against his advisory. The chairman and board should be flexible to change and criticism as it makes things easier for reform or policy to come through; for the best practices and informed judgments, the chairman and the board should trust in the discerning beliefs of the Company secretary.