The Company Secretary

In one line

A company secretary is a member of the Institute of Company Secretaries of India appointed by a company to perform the functions of a company secretary under the Act; he is one of the key managerial personnel; his statutory functions are to report to the Board on compliance, to ensure the company observes the secretarial standards, and to discharge such other duties as may be prescribed.

In exam wording: section 2(24) defines the company secretary, section 2(25) the company secretary in practice, and section 205 states his functions.

Why the law has this at all

A company is under a very large number of continuing obligations, and almost none of them is a single act. Registers must be kept, meetings called on the right notice, resolutions filed within the right number of days, disclosures taken from directors every financial year. Directors cannot do that work, and auditors come once a year and look at the accounts.

So the Act creates an officer whose whole job is compliance, gives him a professional qualification so that the job is done by somebody trained to do it, and makes him one of the key managerial personnel so that the Act's other obligations can attach to him by name.

And then it does something more interesting. It requires him to report to the Board on compliance. That is not a duty to comply; it is a duty to tell the Board where the company stands, which turns a private failure into something the Board is on notice of, and therefore something for which the directors can be held answerable.

Some words this chapter uses

The Company Secretaries Act, 1980 is the statute governing the profession. The Institute of Company Secretaries of India is constituted under section 3 of that Act. Secretarial standards are defined in the Explanation to section 205. In practice means practising the profession rather than being employed by one company.

Who is a company secretary: section 2(24)

"Company secretary" or "secretary" means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980, who is appointed by a company to perform the functions of a company secretary under this Act.

Two conditions, and both must hold.

A qualification. He must be a company secretary as defined in the Company Secretaries Act, 1980, that is to say a member of the Institute.

An appointment. He must be appointed by a company to perform the functions of a company secretary under this Act.

So the definition is not satisfied by either half alone. A member of the Institute working as a company's finance manager is not its company secretary; and an employee called "secretary" who is not a member of the Institute is not one either.