BackGovernment lowers threshold for appointment of company secretary
Modified rule requires firms with a paid up share capital of `5 crore or more to employ a whole-time company secretary
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Making changes to rules under the new companies law, the government has said all companies with a paid up share capital of ₹ 5 crore and more will have to appoint a company secretary.
Earlier, the Companies Act, 2013, had mandated that all companies with a paid up capital of up to ₹ 10 crore were exempted from appointing a company secretary on a mandatory basis.
Following the implementation of the new Companies Act in April this year, the apex body of company secretaries, Institute of Company Secretaries of India (ICSI), had asked the government to amend these rules. Modifying the rule, the ministry of corporate affairs in a notification said that the companies which have “a paid up share capital of ₹ 5 crore or more shall have a whole-time company secretary".
However, companies covered under section 8 (the not-for-profit companies) would be exempted from this requirement. These new rules would be called the “Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2014," it added.
In a letter to the government in April, ICSI had asked the government to modify the rules related to appointment of company secretaries as well as had demanded that secretarial audit should be made applicable to those “companies which are at least subject to internal audit", among others.
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