Appointment of company secretary

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CA. Srinath C (Querist)
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07 August 2014 As It is mandatory to appoint company secretary for a private limited co which has 5 crores paid up capital.
But is there any alternative for avoiding penalty when Company secretary is not appointed.

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Srinath

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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07 August 2014 Yes it is mandatory to appoint Company Secretaries for Private Limited Company having paid up Share capital of Rs 5 crore or more.

As per Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following class of Companies, namely

# Every listed company, and
# Every other public company having paid up share capital of Rs. 10 Crores or more shall have the following whole-time key managerial personnel,—
(i) Managing Director, or Chief Executive Officer or manager and in their absence, a whole-time director;
(ii) Company secretary; and
(iii) Chief Financial Officer
Further, as per recently notified Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a company other than a company which is required to appoint a whole time key managerial personnel as discussed above and which is having paid up share capital of Rs. 5 Crores or more shall have a whole time Company Secretary.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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07 August 2014 No way you can avoid penalty.

PENALTY FOR CONTRAVENTION

On Company - Fine which shall not be less than Rs. 1,00,000/- but which may extend to Rs. 5,00,000/-.

On every director and key managerial personnel of the company who is in default - Fine which may extend to Rs. 50,000/- and where the contravention is a continuing one, with a further fine which may extend to Rs. 1,000/- for every day after the first during which the contravention continues.

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