Appointment of company secretary in subsidiary company
This query is : Resolved
15 May 2013
my query is simple: Mr. x is appt by parent co as a employee and further mr. x was appointed as CS of one of subsidiary co. of parent company. Is it legal and valid in law. As one person is employed with other company and appointed as CS of other company.
request your expert opinion.
request your expert opinion.
02 July 2013
Considering the shortage of company secretaries, the government is planning to relax rules for corporates on employing a full time company secretary but their apex body ICSI is opposing the move.
At present, companies with a paid-up capital of Rs2-crore are required to hire a full time company secretary. The government is planning to amend the Companies Act and raise the threshold limit on equity capital from Rs2-crore to Rs5-crore for employing a full time secretary.
Once the proposal is approved, companies with less than Rs5-crore paid-up capital need not employ a full time company secretary and instead they can hire one on temporary basis, an official in the know of the matter said.
The proposal is aimed at addressing the problem of shortage of company secretary in the country.
There are 31,705 companies with a paid-up capital of Rs2-crore plus, whereas there are only around 15,000 qualified company secretary, making it difficult for many companies to appoint a whole-time company secretary, the official said.
The government is planning to amend the Companies Act, 1956, which lays down the criterion for employing a whole-time company secretary, in this regard.
According to Section 383 (A) of the Companies Act, 1956, “every company having paid up capital of Rs2-crore shall have whole-time secretaries and where the Board of directors of any such company comprises only two directors, either of them shall be the secretary of the company”.
However, there is a huge gap between the availability of company secretary and their demand by companies. As per the officials, there are 19,582 qualified members of the Institute of Company Secretaries of India (ICSI), of which not even 50% are in employment.
The official said, “The companies above Rs5-crore threshold are only 15,000 so it would be prudent to fill the demand-supply mismatch like this.”
At present, companies with a paid-up capital of Rs2-crore are required to hire a full time company secretary. The government is planning to amend the Companies Act and raise the threshold limit on equity capital from Rs2-crore to Rs5-crore for employing a full time secretary.
Once the proposal is approved, companies with less than Rs5-crore paid-up capital need not employ a full time company secretary and instead they can hire one on temporary basis, an official in the know of the matter said.
The proposal is aimed at addressing the problem of shortage of company secretary in the country.
There are 31,705 companies with a paid-up capital of Rs2-crore plus, whereas there are only around 15,000 qualified company secretary, making it difficult for many companies to appoint a whole-time company secretary, the official said.
The government is planning to amend the Companies Act, 1956, which lays down the criterion for employing a whole-time company secretary, in this regard.
According to Section 383 (A) of the Companies Act, 1956, “every company having paid up capital of Rs2-crore shall have whole-time secretaries and where the Board of directors of any such company comprises only two directors, either of them shall be the secretary of the company”.
However, there is a huge gap between the availability of company secretary and their demand by companies. As per the officials, there are 19,582 qualified members of the Institute of Company Secretaries of India (ICSI), of which not even 50% are in employment.
The official said, “The companies above Rs5-crore threshold are only 15,000 so it would be prudent to fill the demand-supply mismatch like this.”
02 July 2013
Dear u didnt understand query x appt as emplooyee of parent company later he appointed as cs of other subsidisry co. Whether this act is vslid in law as salary will be from parent co and whether cs appointed in subsidiar co wil be consider in wholetime emplotment
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