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Regarding appointment of cs

Amit Kumar Verma (CA Final CS Professional) (501 Points)

11 September 2012

Hi friends..

I have a query regarding non appointment of company secretary in a company whose paid up share capital exceeds Rs. 5 crore. The paid up capital of the company has gone above Rs. 5 crore. So the company has to mandatorily appoint a whole time company secretary. The company has give advertisement in the newspaper 2-3 times but failed to engage a whole time company secretary. Now the company has received a Show Cause Notice for violation of section 383A of the Companies Act, 1956 for non appointment of CS.

What should the company do now??

Thanks..

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6 Replies

(Guest)

Amit, tell me one thing, is there a shortage of Company Secretaries ? There are several unemployed and underpaid Company Secretaries in the job market !

If this company fails to appoint a qualified Company Secretary, the company and every officer of the company who is in default, shall be punishable with fine which may extend to Rs. 500 (to low !) for every day during which the default continues.

If the financial position of the company does not permit his appointment, the company will have to prove this fact to the satisfaction of the jurisdictional court (proceedings are usually very slow, therefore, usually some companies do not take Sec. 383A seriously). If the Court finds that the company can employ other officials, then there is no reason or justification for not employing a Whole time Company Secretary.

As regarding the delay in appointment, the Central Government has not laid down any guidelines. It has to be decided on the merits of the case.

Regards,

Veeral Gandhi

2 Like

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 12 September 2012

Agree with the observations of the learned member.

2 Like

Ronak (Management Trainee) (42 Points)
Replied 12 September 2012

Tell me the name of Company. i will send u dozens of Qualified Company Secretary.

Thanks & Regards

Ronak shah

1 Like

Parashar (Company Secretary 2004) (1013 Points)
Replied 12 September 2012

Originally posted by : CS Ankur Srivastava
	Agree with the observations of the learned member.

1 Like

CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13706 Points)
Replied 17 September 2012

This is not a new thing for companies wanting to avoid the mandatory appointment of CS and this is one rather ridiculous loop hole in the law which provides an escape route for companies who do not wish to appoint a whole time company secretary.