The Company Secretary (CS) is an important part of the management and administration of the Company. Being a legal representative of a company, CS carries out and manages various regulatory functions, such as company incorporation, preparation and audit of adequate business reports; filing annual returns; dealing with amended laws regularly, etc. CS is also active as a management consultant on the Company’s board of directors and guides them in corporate governance, strategic management; project planning; capital market and securities law. In short, the corporate secretary works as an internal legal expert and compliance officer in the Company.
CS FEATURED SERVICES
Incorporation of Private Limited Companies, Public Limited Companies, Limited Liability Partnership Firms (LLP), One Person Companies (OPC), Section 8 Companies, Producer Companies.
To initiate and carry incorporation procedures like obtaining name for the proposed Company, authenticating documents and filing of declaration as per the Companies Act, LLP Act to incorporate a Company or LLP Company Secretary plays a vital role.
Conversion of LLP into Private Limited Company:
Several businesses started in India as Limited Liability Partnership (LLP), may now wish to convert into a private limited company for more growth in business or for infusing equity capital. An LLP can be converted into a Pvt. Ltd. company as per the provisions contained in Section 366 of the Companies Act, 2013 and Company (Authorised to Register) Rules, 2014.
However, there are various requirements which need to be satisfied for converting an LLP into a Private Limited Company, for instance, an LLP must have at least 7 partners, approval from all the partners is required, advertisement in newspaper is to be done in a local and a national newspaper, a No Objection Certificate (NOC) is required from the ROC where such LLP is registered and then all the incorporation process has to be undertaken.
Conversion of Private Limited Company to LLP:
The LLP Act allows a private limited company or an unlisted public company to be converted into an LLP under the following conditions:
There is no security interest on its assets at the time of application
No e-forms are pending
There are no open charges against the company
All shareholders have consented to the conversion
All creditors of the company have consented to the conversion
The company must have filed at least one balance sheet and annual return
All shareholders have agreed to become partners of the LLP
The company must have share capital.
The company should not be a Section 25 company or a Section 8 company
Conversion of OPC into Private Limited Company:
Voluntary Conversion: Voluntary conversion into a private/public limited company is not permitted unless two years have expired from the date of incorporation of the One Person Company (OPC). However, if the paid-up share capital of the One Person Company (OPC) exceeds rupees 4 crore or if its average turnover exceeds rupees 40 crores then such One Person Company (OPC) could convert itself into a private limited company within two months. In case of voluntary conversion, One Person Company (OPC) has to intimate the concerned Registrar of Companies (ROC) in form INC-5 within 60 days.
Mandatory/Compulsory Conversion: One Person Company (OPC) has to mandatorily convert itself into Private/Public in the following scenarios:
All the above conversion process will take considerable time and many documents need to be filed with the authorities. Company Secretary will ensure for smooth process of conversion with proper guidance to the client and represent before the concerned authorities.
FEMA, RBI and FDI polices impose many restrictions for the Foreign Citizens, NRI, Foreign entities to invest in Indian. Company Secretary with an up-to-date knowledge with FEMA Act, RBI Act, FDI policies, rule and regulations will advise the client for smooth flow of FDI, Intimation to the RBI, Filing of FCGPR, Share Transfer procedures where the foreign investment in involved.
Secretarial Audit is an independent verification of the records, books, papers and documents by a Company Secretary to check the compliance status of the company and also to ensure the compliance of legal and procedural requirements and processes followed by the company.
All Listed Company, Every Public Company with Paid-up capital of 50 crores or more, Every Public Company with a turnover of 250 crores or more, any private company that is a subsidiary of a public company that falls into the above categories shall conduct a Secretarial Audit.
Secretarial Audit gives comfort to the regulators, stakeholders and management that company has disciplined approach to evaluate and improve effectiveness of risk management, control, and governance processes
Only a member of the Institute of Company Secretaries of India holding certificate of practice (company secretary in practice) can conduct Secretarial Audit and furnish the Secretarial Audit Report to the Company.
An important characteristic of a company is that its shares are transferable. Shares or debentures are movable property. They are transferable in the manner provided by the articles of the company, especially, the shares of any member of a public company.
The transfer of securities is possible through any contract or arrangement between two or more persons. The provisions of the Companies Act deals with the transfer and transmission of securities. Transmission of securities means loss of title on these securities due to death, succession, inheritance, bankruptcy etc. In short, it is something other than transfer.
Transfer of shares means the voluntary handing over of the rights and possibly, the duties of a company member (as represented in a share of the company). The rights and duties of the share transfer happen from a shareholder who wishes to not be a member of the company any more to a person who wishes of becoming a member.
Thus, shares in a company are transferable like any other movable property in the absence of any expressed restrictions under the articles of the company.
Company Secretary being an expert in Company law, provisions relating to the transfer of shares under the Companies Act, 2013 and rules made thereunder will advise in execution of Transfer Deed and drafting the necessary documents to get approval of Share Transfer by the Board of Directors of the Company.
Restructuring is the process of redesigning one or more aspects of a company, and is considered as a key driver of corporate existence. Depending upon the ultimate objective, a company may choose to restructure by several modes, viz. mergers, de-mergers, buy-backs and/ or other forms of internal reorganisation, or a combination of two or more such methods.
However, while drafting a restructuring plan, it is important to take into consideration several aspects viz. requirements under the Companies Act, Competition Act, Stamp duty implications, Accounting methods (AS/ Ind-AS), and last but not the least, taxation provisions.
In this connection, we bring to you a compilation of the various modes of restructuring and the applicable corporate law provisions.
The procedure for the issue of debentures is the same as that for the issue of shares. The intending investors apply for debentures on the basis of the prospectus issued by the company. The company may either ask for the entire amount to be paid on application or by means of instalments on application, on allotment and on various calls. Debentures can be issued at par, at a premium or at a discount. They can also be issued for consideration other than cash or as a collateral security.
A company raises its capital by means of issue of shares. But the funds raised by the issue of shares are seldom adequate to meet their long-term financial needs of a company. Hence, most companies turn to raising long-term funds also through debentures which are issued either through the route of private placement or by offering the same to the public. The finances raised through debentures are also known as long-term debt.
Redemption of debentures refers to extinguishing or discharging the liability on account of debentures in accordance with the terms of issue. In other words redemption of debentures means repayment of the amount of debentures by the company. There are four ways by which the debentures can be redeemed.
These are :
1. Payment in lump sum
2. Payment in instalments
3. Purchase in the open market
4. By conversion into shares or new debentures.
Listing means formal admission of a security to the trading platform of the Exchange. It provides liquidity to investors without compromising the need of the issuer for capital and ensures effective monitoring of conduct of the issuer and trading of the securities in the interest of investors.
The term "delisting" of securities means removal of securities of a listed company from a stock exchange. As a consequence of delisting, the securities of that company would no longer be traded at that stock exchange.
Relisting is the process through which a delisted company lists its shares again on the stock exchange for trading. A company that's delisted its shares voluntarily can make a request for relisting only after the expiry of 5 years from the date of delisting.
Liaison, Co-ordination and Correspondence with client Companies, Registrar of Companies (ROC), Adjudicating Authorities, Regional Director (RD), RBI and other Government Regulating Bodies.
Company Secretary can be an authorised representative to appear before various statutory authorities, adjudicating officers to represent on behalf of the corporate entity and to safeguard the interest of stakeholders.
Statutory Registers, as the name suggests, are the registers to be maintained by a company to record certain important data of the company. This could include data like the details of members, Directors, KMP, etc. As per the Companies Act, 2013, there are certain Statutory Registers that are required to be maintained.
Every company needs to have a registered office within thirty days of its incorporation as per the Companies Act, 2013 (‘Act’). A company should have a registered office at all times until it is in existence. The registered office is mentioned in the Memorandum of Association (MOA) and Articles of Association (AOA).
The registered office is the office where the company receives all the communications and notices sent to it. It is the official office of the company where it carries on business. The address of the registered office needs to be given to the Registrar of Companies (‘ROC’).
However, a company may be required to change its registered office. In such a case, the company needs to follow the compliances laid down in the Act and the Companies (Incorporation) Rules, 2014 (‘Rules’). The compliances to be followed by a company for shifting of registered office from one State to another State is cumbersome procedure as various stakeholders and various statutory authorities involved in the process of such shifting of Registered office from one State to another State.
According to Section 92(2) of the Companies Act, 2013 read with rule 11(2) of Companies (Management and Administration) Rules 2014, the annual return of: A listed company or A company having paid-up share capital of Rs 10 crore or more or Turnover of Rs 50 crore or above will be certified by the company secretary in practice, and the certificate shall be in Form No MGT 8. This is a kind of Mini secretarial audit report which is submitted as an attachment to annual return in Form MGT-7. The Company Secretary shall certify that the annual return discloses the facts correctly and adequately and the firm has complied with all the provisions of the Act.
Under MCA-V3 Precertification and filing of Forms relating to Creation of Charges, Modification of Charges, Satisfaction of Charges and certification of other e-Forms under the Companies Act and LLP Act.
The MCA is upgrading the present version of the portal from Version 2 to Version 3. This is an enhanced version of the V2 portal. Company Secretary is equipped with fullest knowledge to operate the V3 version of MCA Portal.
Striking off the name of a company is an alternative mechanism for closing the operations of the company. The Registrar of Companies ('ROC') can issue a notice to strike off the company name from the Register of Companies for certain reasons.
Company Secretary role is crucial in getting strike-off the name of the Company and revival of struck-off Companies by preparing the necessary documents, certifying & filing necessary documents and representing before the ROC and other authorities.
As per Limited Liability Partnership Rules, 2009, Rule 37 (1) (b) any LLP may after following the below-mentioned process voluntarily apply to ROC for striking off its name from the register of LLP.
Company Secretary plays a vital role in getting strike-off the name of the LLP by preparing the necessary documents, certifying & filing necessary documents and representing before the ROC and other authorities.
The “compounding” refers to the process of voluntarily admitting the contravention, pleading guilty and seeking redressal.
Offences which can be compounded under section 441 of the Act:
The National Company Law Tribunal (“NCLT”) / Regional Director (“RD”) /any officer authorised by Central Government, as the case may be having the power to compound offences punishable with fine only or offence punishable with “fine or imprisonment or both.
Further in following cases, compounding shall not be allowed:
1. Offence punishable with “imprisonment only”; or
2. Offence punishable with “imprisonment and fine”; or
3. Where investigation has been initiated or is pending against the company; or
4. Where similar offence has been compounded within last three years.
Compounding is a golden opportunity for any defaulting entity or person to come forward, admit the default and make the same good. The defaulting party gets discharged on payment of composition fee from that particular offence.
Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies.
The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company.
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