Company Secretary: Appointment, Role, Duties and Liabilities
Appointment framework
This domain tests the company secretary's position as a key managerial person, the appointment process, statutory functions and liability exposure. The focus is on the Companies Act, 2013 and the professional standards expected of a CS.
Core rules and concepts
- The CS is a KMP under Section 2(51) and, for prescribed companies, a whole-time appointment is mandatory under Section 203.
- Qualification: membership of the Institute of Company Secretaries of India (ICSI) is the professional qualification; the appointment is made by the board.
- Appointment formalities: board resolution, consent of the appointee, terms and conditions, and filing of the prescribed form with the Registrar within the stipulated time.
- Functions under Section 205 include reporting to the board, ensuring compliance with the Act and rules, assisting the board in governance, and performing duties assigned by the board.
- Liabilities: the CS can face penalties for statutory non-compliance and professional disciplinary action; personal liability depends on the nature of the default and the facts.
Worked example
A listed company's board appoints a qualified CS at a board meeting. The company must file the appointment with the Registrar within 30 days using the prescribed form, and the CS must comply with the Act, articles and secretarial standards. Reasoning: board appointment is necessary, but it is not complete for compliance until the filing and internal records are updated. The CS cannot rely only on oral instructions.
Traps that cost marks
Do not say a CS need not be an ICSI member. Do not treat the CS as an independent auditor or as a director by default. Do not ignore the filing deadline after appointment. Do not assume the CS has unlimited personal liability for every company default; identify the statutory duty and default.