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Re- appointment of company secretary

SANTOSH SHAH (Company Secretary) (754 Points)

30 June 2014

Dear Members / Experts

Your view required on the following.

Unlisted Public Company, Paid up Capital is Rs.2 Crores.

A Company Secretary is appointed and Letter of Offer states appointed as Company Secretary w.e.f ._____ & Remuneration Details.

In such scenario, should we consider CS as KMP ?,

The Company paid up capital does not meet the criteria as per Rule 8 or 8A of Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014.

Will it be correct in terms of compliance, if I File only Form DIR -12 , and not MGT -14 & MR-1?

As MGT -14 & MR-1 are only for appointment of KMP, and since the paid up capital of this company does not meet the criteria, here CS will be only whole time company secretary and not KMP.

Kindly share your views / advice please.

regards

Santosh Shah

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4 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 30 June 2014

Pl refer Sec.2(51)(ii). CS is by default a KMP in all companies. It has no reference to Sec.203(1) whatsoever.

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SANTOSH SHAH (Company Secretary) (754 Points)
Replied 30 June 2014

Dear Sir

Thanks for the quick reply. I understand that the definition of KMP covers company secretary.

But the point which i would like raise is that, if we go by the definition as per section 2,

then Rule 8 & Rule 8A are they not contradicting ?.

Rule 8 states every public company 10 crores & above shall have KMP.

(In other words, < 10 crores need not have KMP).

Rule 8A states companies not covered under Rule 8, above 5 Croes shall have "Wholetime CS".

Rule 8A, uses the word - whole time company secretary and not KMP.

If we go by Definition, ideally Rule 8A should had also stated

"that all other companies not covered under Rule 8, above 5 Crores shall also have KMP"

In this context, could you please advice.

Also advice if MR-1 & MGT-14 to be filed.

regards

Santosh Shah

Originally posted by : P C Agrawal
	Pl refer Sec.2(51)(ii). CS is by default a KMP in all companies. It has no reference to Sec.203(1) whatsoever.

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 30 June 2014

Let us not mix up two different issues:

Q.1) Whether CS in any company is a KMP?

Ans.: Yes. Refer Sec.2(51).

Q.2) Whether all companies are mandatorily required to appoint CS (who is of course a KMP)?

Ans.: No. Refer Sec.203(1) read with Rules framed thereunder.

RESULT: CS is always a KMP whether it is mandatory to appoint him or not.

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SANTOSH SHAH (Company Secretary) (754 Points)
Replied 30 June 2014

Thank You Sir for clarifying.

regards

Santosh Shah

Originally posted by : P C Agrawal
	Let us not mix up two different issues: Q.1) Whether CS in any company is a KMP? Ans.: Yes. Refer Sec.2(51). Q.2) Whether all companies are mandatorily required to appoint CS (who is of course a KMP)? Ans.: No. Refer Sec.203(1) read with Rules framed thereunder. RESULT: CS is always a KMP whether it is mandatory to appoint him or not.