Ishan Gandhakwala (Consultant) (141 Points)
06 December 2013Under section 383A of Companies Act, it has defined that company is required to appoint a Company Secretary if the Company has a " PAID UP SHARE CAPITAL OF RS. 5 CRORE OR MORE ".
However, my question is that, is this requirement of Share Capital only includes Equity Share Capital, or E.S.C. and Preference Share Capital, both?
GAUTAM SHARMA
(Audit Assistant)
(353 Points)
Replied 06 December 2013
Both.Apply rule of literal interpretation
Ishan Gandhakwala
(Consultant)
(141 Points)
Replied 07 December 2013
so in that case, company is required to appoint CS, suppose, in case, if their ESC is Rs.1 Lakh and their PSC is Rs.10 Crore.??
GAUTAM SHARMA
(Audit Assistant)
(353 Points)
Replied 07 December 2013
The answer will still remain the same.
The Logic of this sec. was only to check compliance by the company, hence it requires paid up capital( Equity+Pref.).Had the sec. used Paid up Equity, then Company could avoid this by issuing less number of Equity shares and More Pref. shartes, Which is mischief in Law.That's why, the Sec. used the Word piad up capital only
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