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Need of Compliance certificate

Neha Gupta (PCS) (377 Points)

10 August 2010

Hi.......

Can any one advise me in this situation:

There is a public limited Company having paid up 3 Crore and the Company Secretary of the Company has resigned on 1st March, 2010. Now question is this

" Is it necessary for the Company to take Compliance Certificate for the F.Y. 2009-2010 ? "

In my opinion yes it is necessary because the Company Secretary has resigned before signing the balance sheet of the Company for the F.Y. 2009-10...............

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19 Replies

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 10 August 2010

Dear Neha,

The paid up capital of the Company is 3 crores and the company has appointed Company Secretary throughtout the year.

W.e.f. 15/09/2009 the Company having paid up capital o Rs. 2 to 5 Crores has an option to appoint full time Company Secretary or to obtain Compliance Certificate. If the company has appointeed full time company secretary, it is not required to obtain the Certificate from the Practicing Company Secretary under rule 3 of the companies (Compliance Certificate) Rules, 2001.

However, in your case the Company Secretary has resigned only on 01st March, 2010 therefore the intention of law for the appointment of Company Secretary has been complied with. Becasue the compliance of law has already been confirmed by the appintment of company secretary throughout the year, which is in other case is to be certified by the Compliance Certificate.

Therefore, in my opinion there is no need for the Compliance Certificate for the Financial Year 2009-10.

Further, contrary views are welcome.

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Neha Gupta (PCS) (377 Points)
Replied 10 August 2010

But, Ankur the C.S. is not in the Company throught out the year it resigns on 1st march and even it does not sign the Balance Sheet of the Company as on 31st March, 2010.....

Now as per my opinion the Company is in need to the Compliance Certificate from a PCS in order to comply with the provisions of Section 383A(1)..

Further views are most welcome.........

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 10 August 2010

Dear Neha,

Signing of Balance Sheet is not the deciding criterion. If he resigned after 31st March, 2010, there may be the circumstances that he would not sign the Balance Sheet..

However, you may obtain Compliance Certificate. But if you asked for the need, then there is no need.

Wait for other comments.

vivek (CS) (751 Points)
Replied 10 August 2010

I have asked more or less similar question and the reply was in below thread:- /forum/compliance-certificate-90192.asp

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Neha Gupta (PCS) (377 Points)
Replied 10 August 2010

Thanks Vivek Sir,

I have gone through the whole conversation but still one point I think is not clear yet, in this case the company has not appointed any Company secretary till date and as per Section 383A either company has a C.S. in full time employment or get a Compliance Certificate from PCS……… for the F.Y. 2009-10

So I think we should take a Compliance certificate……… to comply with the provisions of 383A of the Companies act, 1956.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 10 August 2010

Dear Vivek,

In your case the paid up capital wa 5 Crores, and in that case the appointment of Company Secretary is must. There is no provision of filing Compliance Certificate.

vivek (CS) (751 Points)
Replied 10 August 2010

Ankur sir, in our case after 2 months, we have appointed CS too. In case of Ms. Neha, it seems no requirement of Compliance Certificate but on safer side they can get it to avoid any kind of future non complance notice. Regards,

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 10 August 2010

Agree with Mr. Vivek......

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 10 August 2010

Dear neha,

The requirement for obtaining compliance certificate is mandatory for a company to which proviso to sub-section (1) of section 383A applies even if it has employed a whole time secretary.

thus every Company which is not required to employ a whole time secretary and whose paid up share capital is ten lakh rupees or more at any point of time during the financial year. shall be required to obtain Compliance Certificate from a PCS in respect of that financial year.

For clarification See ICSI Guidance Note on Compliance Certificate.

Regards

ACS Vaibhav

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 10 August 2010

Originally posted by : vaibhavshukla
	Dear neha, The requirement for obtaining compliance certificate is mandatory for a company to which proviso to sub-section (1) of section 383A applies even if it has employed a whole time secretary. thus every Company which is not required to employ a whole time secretary and whose paid up share capital is ten lakh rupees or more at any point of time during the financial year. shall be required to obtain Compliance Certificate from a PCS in respect of that financial year. For clarification See ICSI Guidance Note on Compliance Certificate. Regards ACS Vaibhav

Dear Vaibhav,

Sorry to say but dear i do not agree with your reply. Please refer to Notification no. GSR11(E) dated 05/01/2009. (Attached herewith).

If the Company has appointed Company Secretary there is no need to obtain Compliance Certificate from a Practicing Company Secretary.

Attached File : 57 gsr11 e 20jan2009 app and qualification of cs.pdf downloaded: 312 times

vivek (CS) (751 Points)
Replied 10 August 2010

Before this also there was a Circular of MCA which was permitting not to obtain the Compliance Certificte if COmpany has a appointed a Whole time COmpany Secretary:-

No.17/47/2002-CL.V

Government of India

Ministry of Finance

Department of Company Affairs

5th Floor, ‘A’ Wing, Shastri Bhawan,

Dr. R.P. Road, New Delhi – 110 001.

Dated 11th December, 2003.

All Chambers of Commerce & Industry

(As per standard list)

Subject:- Compliance Certificate – clarification.

Sir,

Proviso to section 383A (1) of the Companies Act, 1956 inter-alia provides that every company not required to employ a whole-time secretary under sub-section (1) of section 383A and having a paid-up share capital of ten lakh rupees or more shall file with the Registrar a certificate from a secretary in whole time practice as to whether the company has complied with all the provisions of this Act and a copy of such certificate shall be attached with Board’s report referred to in section 217.

2. The issue whether a company which is not required to appoint a whole-time company secretary but has voluntarily appointed a whole-time secretary, is required to obtain compliance certificate from secretary in whole-time practice was under examination in this Department.

3. In consultation with the Department of Legal Affairs it is clarified that a company which is not required under law to employ a whole-time secretary, but has nevertheless employed a whole-time Company Secretary within the meaning of section 2(1)(c) of the Company Secretaries Act, 1980, such a company is not required to obtain compliance certificate from Company Secretary in practice. In other words, no company employing a full time Company Secretary is required to also obtain a compliance certificate from a Company Secretary in practice.

4. You are requested to kindly bring this circular to the notice of your constituents.

Yours faithfully,

(N.K. Vig)

Under Secretary to the Govt. of India

(Tel: 2338 7174)

Regards,

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