It was not possible for Government of India to monitor companies which were huge in number, So GoI decided to set up a statutory body which could ensure that companies are complying laws applicable to them, with this view the Institute of Company Secretaries of India was set up and registered as a company on 4th October, 1968 under the Companies Act, 1956 by the Government of India to regulate and develop the profession of Company Secretaries and to take over from the Government of India the entire work connected with the companies.

The Institute became Statutory Body from the status of Company with effect from 1st January, 1981.  Since 1981 ICSI is continuously working as an extended hand of Government as its motto is “Satyam Vada, Dharmam Chara —Speak the Truth, abide by the law”.

ICSI focuses on providing well qualified and trained professionals to corporate sector with a view to ensure Corporate Governance.

Our Hon’ble Prime Minister Shri Narendra Modi issued a statement in a program-

“कंपनी सेक्रेटरी एक विशेष प्रकार का विद्वान होता है”

In earlier days every company used to be covered under Companies Act, 1956 and rule made thereunder. As per Companies (Appointment and Qualifications) of Secretary) Rules, 1988, every company having paid up share capital of two crore rupees or more was required to appoint a whole time Company Secretary, later this threshold was increased to 5 crore rupees.

In 2014, Government of India notified Companies Act, 2013 by repealing the Companies Act, 1956 and as per section 203 of Companies Act, 2013 read with rule 8 and rule 8A of companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 following companies are required to appoint a whole time Company Secretary-

1-     Every listed company

2-     Every unlisted public limited company having paid up share capital of 10 crore rupees or more

3-     Every private limited company having paid up share capital of 5 crore rupees or more

Now Ministry of Corporate Affairs has issued a notification to amend rule 8A for increasing threshold from 5 crore to 10 crore w.e.f. 1st April, 2020.

After this amendment every listed company and unlisted company having paid up share capital of 10 crore or more will be appointing a whole time company secretary which is wrong somewhere.

We the Company Secretaries oppose this amendment due to following reasons-

-          We ensure that companies are complying labour and locall laws.

-          We ensure that companies are adhering to the environmental laws which largely affect people’s lives.

-          We ensure that workers/employees are paid wages timely as per that rates notified.

-          We facilitate the convening of meetings and attend Board, committee and general meetings.

-          We ensure that companies are not hiding anything from Government bodies.

-          We maintain registers and records required under various laws.

-          We take responsibility for non-compliance of the companies.

-          We prevent companies from doing any unethical/illegal practice by providing legal advice to the Board.

-          We work for protecting the interest of stakeholders.

-          We represent before various regulators, and other authorities under the Act in connection with discharge of various duties.

-          We assist the Board in the conduct of the affairs of the company.

 

A company having paid up share capital of 5 crore rupees or more is not a small company and it affects various stakeholders including labour, financial institutions, revenue department etc.

Further it has never been easy to become a CS. A person needs to study 10-12 hours a day for a minimum period of 4 years, he needs to go through various trainings. Knowledge, Skill and hard work become worthless when platform is not given to a qualified person.

This amendment will lead to unemployment and non-compliance, we request MCA to take this amendment back.