As per 18th January 2020 Company secretary’s regulations, 1982, some of the amendments necessary were attributed. This regulation introduces some changes to the training structure for the company secretary course. In the year 2019, there was a scarcity of full-time company secretaries. This demand brought forward the amendment that the companies with ten crores or more of the share capital must employ a company secretary. Indian companies with operations of five crores share capital must have a company secretary is a previous law. The number of companies with ten crores shares capital is comparatively less number. This new change will increase the value of company secretaries as only big corporate companies place them.
RBI has recently made it mandatory for the listed and unlisted commercial banks to do a secretarial audit. All these measures show that the value and demand for company secretaries tend to grow in India. Let me find the answer to the question that – what creates demand for company secretaries? And what is corporate governance? The board and the group of management personnel face many issues that constitute for corporate governance crisis. The corporate law has the basis of the following changes in the governance Covid-19 crisis management, dividend pay-out decision, fundraising decision, workforce restructuring decision, partnership decision, stakeholder engagement, board composition, auditor report, third party funding, and engagement operations of stakeholder.
The company secretary course has compliance management and secretarial audit to ease the business and set high standards. The set of records such as registers, filing of forms, documents, returns, MOA, AOA, shareholders, stakeholders, secretarial standards, key managerial personnel, disclosures, issue of shares, transfer, other securities, and other related documents are the secretarial record. There is a crucial responsibility for the company secretaries to follow the acts and amendments. The company secretaries need to remember the amendments six months before the exam if there are new changes to the company’s law. The company secretaries have a professional responsibility to be perfect.
Areas of secretarial audit
The listed company and public company having more than 50 crores of paid-up share capital secretarial audit is compulsory. Companies with more than 250 crores turnover need a secretarial audit. The laws used in the secretarial audit are the companies Act, 2013, SCRA, Depositories ACT, 1996, Foreign exchange management Act, 1999, SEBI, other laws like labor law, environmental law, and competition law. The following points commemorate the operations of the secretarial audit.
- The agreement copy between the company and the stock exchange provides the listing details.
- A secretarial audit provides the details regarding the board including the executive director, women director, non-executive director, and Independent director.
- The details of the agenda of the board meeting need to be checked.
- The details of the minutes of the board meeting need to be checked.
- The details of specific events during the reporting period need to be checked.
The penalty with the secretarial audit report
If there are false materials produced by the company secretary or omit any fact, then as per section 447 he undergoes imprisonment or pays an alternative penalty as per the amount involved. The other penalties like removal of name from the membership and fine of one lakh to five lakh insist on the point that company secretaries are highly responsible.
Importance of secretarial audit
- By taking care of the legal compliances, the directors get peace of mind and confidence.
- The recognition of ICSI gauged as the professional standard for the ethics of the businesses.
- Companies overlook some legal matters and under look into some legal matters. In some cases, this leads to risk. The process of the secretarial audit is to look into the issues that require attention and in this way it reduces risk.
- Secretarial audit improves the brand value of the company.
- A secretarial audit provides a guarantee to the promoters and the stakeholders.
- A secretarial audit provides the investors with the information of the company to take the right decision.
- The creditors, banks, financial institutions, and consumers benefit from the secretarial audit information.
The companies Act, 2020 was passed by the government with amendments to the previous company law. The changes emphasize areas like CSR liability, the definition of listed companies, and the penalty for the offenses reduced to 50 percent. And it is also about the empowerment regarding the public companies to get listed in a foreign jurisdiction.
The Ministry of corporate affairs motto is to make the operations of companies easy. For the prevailing covid-19 concerns, some latest amendments help for smooth functioning. It is essential to know these amendments to write them in the exam for the students. The expert knowledge of professionals finds the solution to changing problems of the business. Hence, it is essential to keep updated with the latest-knowledge to gain marks in the Company secretary course.