Company Secretaries Act, 1980

Makes provision for the regulation and development of the profession of Company Secretaries in India.

Company Secretaries Act, 1980

[Act 56 of 1980]      [10th December, 1980]

An Act to make provision for the regulation and development of the profession of Company Secretaries.

Be it enacted by Parliament in the Thirty-first Year of the Republic of India as follows :—

Statement of Objects And Reasons.—One of the basic concepts recognised by the Companies Act, 1956, is that the affairs of companies encompass not only the interests of the shareholders and those entrusted with the management, but also the interests of workers, consumers and the community at large. Besides the Companies Act, there are other allied enactments like the Capital Issues (Control) Act, 1947, the Industries (Development and Regulation) Act, 1951, the Monopolies and Restrictive Trade Practices Act, 1969, the Foreign Exchange Regulation Act, 1973, and other Acts which also have a direct and substantial bearing on the working of the corporate sector in India. In order to ensure that companies do comply with various provisions of law, the necessity for companies to appoint qualified Secretaries with certain professional qualifications and training was being increasingly felt. From 1961 onwards, therefore, the Department of Company Affairs started holding of examinations for company secretaryship and awarding the Diploma called the Government Diploma in Company Secretaryship. This position continued till 1968 when the Government conceived the idea of giving statutory recognition to the Institute of Company Secretaries. However, to begin with, it was decided in 1968 to promote a separate institution under Section 25 of the Companies Act, i.e. a non-profit sharing company and later to convert it into a statutory body. Accordingly, the Government of India promoted the Institute of Company Secretaries of India and registered it as a company on the 4th October, 1960 under a licence granted under Section 25 of the Companies Act.

The Administrative Reforms Commission has also examined the desirability of encouraging the growth of the profession of Company Secretaries as a necessary adjunct for a more efficient working of the corporate sector. The said Commission has also recommended that the companies with a certain paid-up capital should compulsorily appoint qualified Secretaries and that suitable qualifications for such Secretaries should be prescribed by the Government. They further observed that the qualification should include passing of an examination conducted by the Government on all-India basis and training in the corporate sector (Recommendation No. 10, Chapter VI, Paragraph 12). For the past ten years, the profession of Company Secretaries has grown and more and more of our younger citizens are registering for examinations conducted by the Institute. Apart from the employment prospects and potential which the profession holds out, the need for having increasing number of professionally qualified Company Secretaries has been further recognised by the Companies (Amendment) Act, 1974, which requires every company having a paid-up share capital of Rs 25 lakhs and above to appoint a qualified person as a whole-time Secretary. Even in respect of companies with a paid-up share capital of less than Rs 25 lakhs the need and desirability of having the services of qualified Secretaries in practice is being increasingly felt by the companies. The scope of the functions and duties of a Secretary has increased considerably under modern conditions and the importance of the status of the Secretary as a Company Administrator has been both judicially and statutorily recognised.

It is therefore proposed to undertake legislation to regulate the profession of Company Secretaries on the same lines as the profession of Chartered Accountants and the profession of Cost and Works Accountants which are regulated respectively by the Chartered Accountants Act, 1949 and the Cost and Works Accountants Act, 1959, since all these professions have a direct bearing on the efficient functioning of corporate sector. The Institute of Company Secretaries of India to be constituted under the proposed legislation will have the responsibility for conducting examinations for the profession of Company Secretaries for regulating the profession including professional misconduct and for creating necessary facilities for the growth and training of the members of the profession.

The Bill is intended to give effect to the above proposals. The provisions of the Bill are further explained in the notes on clauses.

Chapter I

PRELIMINARY

1. Short title, extent and commencement.

1. Short title, extent and commencement.—(1) This Act may be called the Company Secretaries Act, 1980.

(2) It extends to the whole of India.

(3) It shall come into force on such date [i]as the Central Government may, by notification in the Official Gazette, appoint.

Other Contents of Company Secretaries Act, 1980​
Sections 1 to 8 Sections 9 to 23 Sections 24 to 40 Schedules

2. Definitions and interpretation.

2. Definitions and interpretation.—(1) In this Act, unless the context otherwise requires,—

(a) “Associate” means an Associate Member of the Institute;

[ii][(aa) “Authority” means the Appellate Authority referred to in Section 22-A;

(aaa) “Board” means the Quality Review Board constituted under Section 29-A;]

(b) “Companies Act” means the Companies Act, 1956 (1 of 1956);

(c) “Company Secretary” means a person who is a member of the Institute;

(d) “Council” means the Council of the Institute constituted under Section 9;

(e) “Dissolved Company” means the Institute of Company Secretaries of India registered under the Companies Act;

(f) “Fellow” means a Fellow Member of the Institute;

[iii][(fa) “firm” shall have the meaning assigned to it in Section 4 of the Indian Partnership Act, 1932 (9 of 1932), and includes—

(i) the limited liability partnership as defined in clause (n) of sub-section (1) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); or

(ii) the sole proprietorship,

registered with the Institute;]

(g) “Institute” means the Institute of Company Secretaries of India constituted under this Act;

[iv][(ga) “notification” means a notification published in the Official Gazette;]

[v][(gb) “partner” shall have the meaning assigned to it in Section 4 of the Indian Partnership Act, 1932 (9 of 1932) or in clause (q) of sub-section (1) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), as the case may be;

(gc) “partnership” means—

(A) a partnership as defined in Section 4 of the Indian Partnership Act, 1932 (9 of 1932); or

(B) a limited liability partnership which has no company as its partner;]

(h) “Prescribed” means prescribed by regulations made under this Act;

(i) “President” means the President of the Council;

(j) “Register” means the Register of members of the Institute maintained under this Act;

[vi][(jj) “sole proprietorship” means an individual who engages himself in the practice of the profession of the company secretaries or offers to perform services referred to in clauses (b) to (f) of sub-section (2);]

[vii][(ja) “specified” means specified by rules made by the Central Government under this Act;

(jb) “Tribunal” means a Tribunal established under sub-section (1) of Section 10-B;]

(k) “Vice-President” means the Vice-President of the Council;

(l) “Year” means the period commencing on the 1st day of April of any year and ending on the 31st day of March of the succeeding year;

(m) words and expressions used herein and not defined but defined in the Companies Act shall have the meanings respectively assigned to them in that Act.

(2) Save as otherwise provided in this Act, a member of the Institute shall be deemed “to be in practice” when, individually or in partnership with one or more members of the Institute in practice or in partnership with members of such other recognised professions as may be prescribed, he, in consideration of remuneration received or to be received,—

(a) engages himself in the practice of the profession of Company Secretaries to, or in relation to, any company; or

(b) offers to perform or performs services in relation to the promotion, forming, incorporation, amalgamation, reconstruction, reorganisation or winding up of companies; or

(c) offers to perform or performs such services as may be performed by—

(i) an authorised representative of a company with respect to filing, registering, presenting, attesting or verifying any documents (including forms, applications and returns) by or on behalf of the company,

(ii) a share transfer agent,

(iii) an issue house,

(iv) a share and stock broker,

(v) a secretarial auditor or consultant,

(vi) an adviser to a company on management, including any legal or procedural matter falling under the Capital Issues (Control) Act, 1947 (29 of 1947), the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Companies Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956), any of the rules or bye-laws made by a recognised stock exchange, the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969), the Foreign Exchange Regulation Act, 1973 (46 of 1973), or under any other law for the time being in force,

(vii) issuing certificates on behalf of, or for the purposes of, a company; or

(d) holds himself out to the public as a Company Secretary in practice; or

(e) renders professional services or assistance with respect to matters of principle or detail relating to the practice of the profession of Company Secretaries; or

(f) renders such other services as, in the opinion of the Council, are or may be rendered by a Company Secretary in practice;

and the words “to be in practice”, with their grammatical variations and cognate expressions, shall be construed accordingly.

Chapter II

INSTITUTE OF COMPANY SECRETARIES OF INDIA

3. Incorporation of the Institute.

3. Incorporation of the Institute.—(1) All persons whose names are entered in the Register of the dissolved company immediately before the commencement of this Act and all persons who may hereafter have their names entered in the Register to be maintained under this Act, so long as they continue to have their names borne on the Register to be maintained under this Act, are hereby constituted a body corporate by the name of the Institute of Company Secretaries of India and all such persons shall be known as members of the Institute.

(2) The Institute shall have perpetual succession and a common seal and shall have power to acquire, hold and dispose of property, movable or immovable and shall by its name sue or be sued.

4. Entry of names in the Register.

4. Entry of names in the Register.—(1) Any of the following persons shall be entitled to have his name entered in the Register, namely :—

(a) any person who immediately before the commencement of this Act was an Associate or a Fellow (including an Honorary Fellow) of the dissolved company;

(b) any person who is a holder of the Diploma in Company Secretaryship awarded by the Government of India;

(c) any person who has passed the examinations conducted by the dissolved company and has completed training either as specified by the dissolved company or as prescribed by the Council, except any such person who is not a permanent resident of India;

(d) any person who has passed such examination and completed such training, as may be prescribed for membership of the Institute;

(e) any person who has passed such other examination and completed such other training without India as is recognised by the Central Government or the Council as being equivalent to the examination and training prescribed under this Act for membership of the Institute:

Provided that in the case of any person belonging to any of the classes mentioned in this sub-section who is not permanently residing in India, the Central Government or the Council may impose such further conditions as it may deem to be necessary or expedient in the public interest.

(2) Every person belonging to the class mentioned in clause (a) or clause (b) of sub-section (1) shall have his name entered in the Register without the payment of any entrance fee.

[viii][(3) Every person belonging to any of the classes mentioned in clauses (c), (d) and (e) of sub-section (1) shall have his name entered in the Register on application being made and granted in the prescribed manner and on payment of such fees, as may be determined, by notification, by the Council, which shall not exceed Rupees Three thousand:

Provided that the Council may with the prior approval of the Central Government, determine the fee exceeding rupees three thousand, which shall not in any case exceed Rupees Six thousand.]

(4) The Central Government may take such steps as may be necessary for the purpose of having the names of all persons belonging to the classes mentioned in clauses (a) and (b) of sub-section (1) entered in the Register at the commencement of this Act.

(5) Notwithstanding anything contained in this section, the Council may confer on any person Honorary Fellow Membership, if the Council is of the opinion that such person has made a significant contribution to the profession of Company Secretaries and thereupon the Council shall enter the name of such person in the Register but such person shall not have any voting rights in any election or meetings of the Institute and shall not also be required to pay any fee to the Institute.

5. Associates and Fellows.

5. Associates and Fellows.—(1) The members of the Institute shall be divided into two classes designated as Associates and Fellows.

(2) Any person other than a person to whom the provisions of sub-section (4) apply, shall, on his name being entered in the Register, be deemed to have become an Associate and as long as his name remains so entered, shall be entitled to use the letters “A.C.S.” after his name to indicate that he is an Associate.

[ix][(3) A person, being an Associate who has been in continuous practice in India as a Company Secretary for at least five years and a person who has been an Associate for a continuous period of not less than five years and who possesses such qualifications or practical experience as the Council may prescribe with a view to ensuring that he has experience equivalent to the experience normally acquired as a result of continuous practice for a period of five years as a Company Secretary shall, on payment of such fees, as may be determined, by notification, by the Council, which shall not exceed Rupees Five thousand, and on application made and granted in the prescribed manner, be entered in the Register as a Fellow:

Provided that the Council may with the prior approval of the Central Government, determine the fee exceeding Rupees Five thousand, which shall not in any case exceed Rupees Ten thousand.

Explanation I.—For the purposes of this sub-section, a person shall be deemed to have practised in India for any period for which he has held a certificate of practice under Section 6, notwithstanding that he did not actually practise during that period.

Explanation II.—In computing the continuous period during which a person has been an Associate of the Institute, there shall be included any continuous period during which the person has been an Associate of the dissolved company immediately before he became an Associate of the Institute.]

(4) Any person who was Fellow of the dissolved company and who is entitled to have his name entered in the Register under clause (a) of sub-section (1) of Section 4, shall be entered in the Register as a Fellow.

(5) Any person whose name is entered in the Register as a Fellow shall, so long as his name remains so entered, be entitled to use the letters “F.C.S.” after his name to indicate that he is a Fellow.

6. Certificate of practice.

6. Certificate of practice.—(1) No member of the Institute shall be entitled to practice, whether in India or elsewhere, unless he has obtained from the Council a certificate of practice.

[x][(2) A member who desires to be entitled to practise shall make an application in such form and pay such annual fee, for his certificate as may be determined, by notification, by the Council, which shall not exceed Rupees Three thousand, and such fee shall be payable on or before the 1st day of April in each year:

Provided that the Council may with the prior approval of the Central Government, determine the fee exceeding Rupees Three thousand, which shall not in any case exceed Rupees Six thousand.]

[xi][(3) The certificate of practice obtained under sub-section (1) may be cancelled by the Council under such circumstances as may be prescribed.]

7. Members to be known as Company Secretaries.

7. Members to be known as Company Secretaries.—Every member of the Institute in practice shall, and any other member may, use the designation of a Company Secretary and no member using such designation shall use any other description, whether in addition thereto or in substitution therefor:

Provided that nothing in this section shall be deemed to prohibit any such member from adding any other description or letters to his name, if entitled thereto, to indicate membership of such other institute whether in India or elsewhere as may be recognised in this behalf by the Council, or any other qualification that he may possess, or to prohibit a firm, all the partners of which are members of the Institute and in practice, from being known by its firm name as Company Secretaries.

8. Disabilities.

8. Disabilities.—Notwithstanding anything contained in Section 4, a person shall not be entitled to have his name entered in, or borne on, the Register if he—

(a) has not attained the age of twenty-one years at the time of his application for the entry of his name in the Register; or

(b) is of unsound mind and stands so adjudged by a competent court; or

(c) is an undischarged insolvent; or

(d) being a discharged insolvent, has not obtained from the court a certificate stating that his insolvency was caused by misfortune without any misconduct on his part; or

(e) has been convicted by a competent court, whether within or without India, of an offence involving moral turpitude and punishable with imprisonment or of an offence, not of a technical nature, committed by him in his professional capacity unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, removed the disability; or

(f) has been removed from membership of the Institute on being found on inquiry to have been guilty of professional or other misconduct:

Provided that a person who has been removed from membership for a specified period shall not be entitled to have his name entered in the Register until the expiry of such period.

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