C.s. as director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 October 2013
Can a C.S.in whole time employment of a listed co., act at the same time, as the director of other co. and sign the financial statements of the later co.?

If no under which provisions?

Ajay Mishra

Ajay Mishra (Expert)
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05 October 2013 Hi

Where the Board of directors of any company having a paid up capital of Rupees Two Crores or more consisting of only two directors, neither of them shall be appointed as a secretary of the company.
However, if a private company has more than two directors and a public company which has more than three directors on the Board, one of them can act as a secretary subject to the possession by him the prescribed qualifications under the Companies (Appointment and Qualification of Secretary) Rules, 1988 and subject to the compliance of the provisions of section 314 of the Companies Act, 1956.

Regulation 82 of Table A provides that subject to the provisions of the Act,—
(1) A manager or secretary may be appointed by the Board for such term, at such remuneration and upon such conditions as it may think fit; and any manager or secretary so appointed may be removed by the Board;
(2) A director may be appointed as a manager or secretary.

But he can not appoint as a director of other company.

Ajay Mishra

Ajay Mishra (Expert)
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05 October 2013
Company Secretary in practice may become non-executive director/promoter/promoter-director/ subscriber:

The Council of the Institute at its 156th Meeting held on March 19-20-2005, in exercise of its powers under regulation 168 of the Company Secretaries Regulations, 1982 has accorded general permission to its members in practice to become non-executive director/promoter/promoter-director/subscriber to the Memorandum and Articles of Association of a company the objects of which include areas, which fall within the scope of the profession of Company Secretaries irrespective of whether or not the practising member holds substantial interest in that company.
The Council has further allowed members in practice to become non-executive director/promoter/ promoter director/subscriber to the Memorandum and Articles of Association of a company which is engaged in any other business or occupation provided that the practising member does not hold substantial interest in the company.
The Council in its resolution adopted at the said meeting defined the term non-executive director as to mean an ordinary director who is required to attend the meetings of the Board or its committees only, not paid any remuneration except the sitting fees for attending the Board/Committee meetings and any remuneration to which he is entitled as ordinary director, and devoting his time for the company only to attend meetings of the Board or Committees thereof and not for any other purpose.

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Ankur Garg

Ankur Garg (Expert)
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06 October 2013 Yes this appointment is possible.

If you go ahead with this appointment, CS will be considered as Whole Time Director as per DCA Clarification.

Kindly read explanation to section 269 of the companies act, 1956.

Thanks

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Querist : Anonymous

Querist : Anonymous (Querist)

07 October 2013 thanks a lot Mr. Mishra and Mr. Garg.

does this mean that a whole time employed Co. Secretary of a listed co. can be appointed as an executive / non ex.director of another pvt. ltd. co. and sign the financial statements ?- does the institute have any rule against such dual engagement of a CS.

Querist : Anonymous

Querist : Anonymous (Querist)

07 October 2013 Requesting an early reply.

Ankur Garg

Ankur Garg (Expert)
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07 October 2013 No.
In your case appointment of CS in another company is not at all possible. However he can be a director in the company in which he is CS.