ICSI hopeful of de-notifying contentious sections in Companies Act

New sections doubled paid up share capital norms for appointing a company secretary, but exempted pvt companies from appointing a CS

The Institute of Company Secretaries of India (ICSI) today said it was hopeful the next government would simplify the contentious sections of newly-notified sections of Companies Act, 2014.

“We have written to the Ministry of Corporate Affairs of the newly-notified sections of Companies Act, 2014, some of which are fatally contentious to the profession of Company Secretaries (CS) and the ministry’s response has been positive,” said R Sridharan, president of ICSI.  

The new sections, he said, had doubled public companies’ paid up share capital requirement for appointing a company secretary from Rs 5 crore to Rs 10 crore, but  exempted private companies from appointing a CS; exempted nearly 99 per cent of the 1.3-million Indian registered companies from secretarial audits and had done away with the requirement of pre-certification of various e-forms, which was earlier done by the CS, said Sridharan.

By doing away the requirement of pre-certification, the ministry had moved against its proposed better corporate governance, he added.

Under the draft rules, the threshold for appointing a CS was proposed at Rs 5 crore of paid up share capital, which is the same limit as provided under the Companies Act, 1956. However, under the final Company Rules notified by the MCA on April 1, Sections 383 and 269 were merged into Section 203 as Key Managerial Position (KMP). A CS falls under the ambit of KMP.

ICSI will set up a 50,000-sft centre of excellence at Uppal near Hyderabad and the facility would be ready in two years. The centre would serve the needs of CS aspirants.