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Appointment of company secretary related query

RAHUL JAIN (ASSISTANTMANAGER INTERNAL AUDIT ) (111 Points)

26 June 2016

I need clarification regarding appointment of Company Secretary in a company having paid up capital more than Rs. 5.00 Crore but less than Rs. 10.00 Crore.

Kindly please clarify that is board of director pass resolution for appointment of an Company Secretary whose Membership allotment application is pending at ICSI as on date of board resolution date. Board in it's resolution write that the person will hold office as Company Secretary from an specified date (For e.g. 01/07/2016) or date of allotment of Membership by ICSI whichever is later.

Is this resolution is correct in the eye of Companies Act 2013, kindly please clarify.

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7 Replies

Kumud prasad (Practicing CS) (216 Points)
Replied 26 June 2016

Rahul Ji

As per my knowledge BOD cant pass resolution for appointment of CS, whose membership application is pending before Institute.

2 Like

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RAHUL JAIN (ASSISTANTMANAGER INTERNAL AUDIT ) (111 Points)
Replied 26 June 2016

THANKS FOR YOUR REPLY SIR,

BUT CAN YOU QUOTE ANY REFERENCE OF SECTION OR RULE.

IN GIVEN CASE BOD PASS RESOLUTION THAT PERSON WHO IS ALREADY IN COMPANIES EMPLOYEMENT IS APPOINTED AS POST OF COMPANY SECRETARY FROM DATE OF HIS MEMBERSHIP OF LATER DATE WHICH IS SPECIFIED IN BOARD RESOLUTION, IS IT'S VALID AS PER COMPANIES ACT.

1 Like

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 27 June 2016

I do not see any issue in this. Board resolution will be effective only if he gets membership No., otherwise not.

It is similar to a person being appointed as a director subject to getting his DIN.

2 Like

RAHUL JAIN (ASSISTANTMANAGER INTERNAL AUDIT ) (111 Points)
Replied 27 June 2016

THANKS FOR YOUR REPLY SIR,

BUT SIR AS PER COMPANIES ACT CS MEANS AN MEMBER OF ICSI, SO IS THIS RESOLUTION IS CORRECT ?

CS Arjun Rajagopal (B.com, ACS) (1056 Points)
Replied 27 June 2016

As per Section 2(24) of Companies Act, 2013 "Company Secretary" means a company secreteray as defined in Section 2(1)(c) of CS Act, 1980 who is appointed by a company to perform the functions of a company secretary under this Act.

As per Section 2(1)(c) of CS Act, 1980, CS means a person who is a member of the institute.

Combined reading of above two sections makes it clear that a company can only appoint a person as Company Secretary who is a member of the institute.

Since Board of directors in your case passed an resolution with a remark "whichever is later" I don't see any issue in your resolution.

Regards,

Arjun Rajagopal

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RAHUL JAIN (ASSISTANTMANAGER INTERNAL AUDIT ) (111 Points)
Replied 27 June 2016

thanks sir for your reply

RAHUL JAIN (ASSISTANTMANAGER INTERNAL AUDIT ) (111 Points)
Replied 27 June 2016

But issue is that, Companies act said to appoint a person who is Company Secretary, person who applied for membership is eligible for appointment is the question.