Financial Daily from THE HINDU group of publications
Thursday, Dec 18, 2003
Financial Daily from THE HINDU group of publications Thursday, Dec 18, 2003 |
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Corporate
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Regulatory Bodies & Rulings DCA clarifies on compliance certificate status for companies Richa Mishra
New Delhi , Dec. 17 COMPANIES employing a full-time company secretary would not be required to obtain a compliance certificate from a practicing company secretary even if their paid-up capital is below the Rs 2-crore level. A clarification to this effect from the Department of Company Affairs (DCA) would settle all doubts raised in respect of the status of compliance certificates for those companies that have voluntarily employed a company secretary even though there is no such legal requirement. At present, companies having a paid-up capital of Rs 2 crore or more are mandatorily required to have a company secretary on their rolls, while those with paid-up capital of Rs 10 lakh or more and less than Rs 2 crore need a compliance certificate to be filed with the Registrar of Companies. "In June 2002, the Department had increased the paid-up capital limit for appointment of a company secretary by a company from Rs 50 lakh to Rs 2 crore. Hence, the companies that had paid-up capital of Rs 10 lakh or more and less than Rs 2 crore, had to get a compliance certificate from a company secretary in practice. This had created some confusion as many companies having paid-up capital of Rs 50 lakh or more were already having a whole-time company secretary," official sources told Business Line. Based on a representation from a Punjab-based Government company the department in consultation with the Department of Legal Affairs has issued the clarification. Section 383A of the Companies Act, 1956, states that every company having such paid-up share capital as may be prescribed shall have a whole-time secretary. And the companies having a paid-up share capital of Rs 10 lakh or more shall file with the Registrar a certificate from a secretary in a whole-time practice.
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