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Paid up capital limit for CS apptmt raised to Rs.5 crores

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Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby pca » Thu Jan 08, 2009 12:13 pm

Dear friends,

Pl see attached notification.

Regards,
Attachments
Cos Aptmt & Qualfn of Secy Amdmt Rules 2009.doc
(23 KiB) Downloaded 1058 times
PC Agrawal
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby Vjkaha » Thu Jan 08, 2009 1:35 pm

Company Secretary Appointment Rules amended-5crores&above-Mandatory

More job opportunities for Company Secretaries in employment as it will be become mandatory & an enforceable provision (atleast now) OR more unemployment for Company Secretaries in employment & more opportunities for practice!!! These are all just views, the quality in Company Secretaries will always be banked upon, irrespective of any legislative amendments. We, Company Secretaries, lets keep rockin...

Amended & Applicable Provision from 15th March 2009:

Get Mandatory Compliance Certificate:
if your share capital is between 50 lakhs & 2 crores;
if your share capital is between 2 crores & 5 crores and you have not appointed whole time company secretary.
Mandatorily appoint a Whole Time Company Secretary:
if your share capital is between 2 crores & 5 crores and you have not got the Compliance Certificate;
if your share capital is above 5 crores.
And, NO special provisions for Companies having its registered office in a place with a population of less than one lakh as per 2001 census.



COMPANIES (APPOINTMENT AND QUALIFICATIONS OF SECRETARY) AMENDMENT RULES, 2009 - AMENDMENT IN RULE 3

NOTIFICATION NO. G.S.R. 11 (E), DATED 5-1-2009



In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 642 read with clause (45) of section 2 and section 383A of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Companies (Appointment and Qualifications of Secretary) Rules, 1988, namely :—

1. (1) These rules may be called the Companies (Appointment and Qualifications of Secretary) Amendment Rules, 2009.

(2) They shall come into force from the 15th day of March, 2009.

2. In the Companies (Appointment and Qualifications of Secretary) Rules, 1988, in rule 2,

(i) in sub-rule (1) and in the proviso to sub-rule (4), for the words "rupees two crores" the following words shall be substituted, namely:—

"five crore rupees";

(ii) in sub-rule (3), the second and third proviso shall be omitted;

(iii) after sub-rule (3), the following sub-rule shall be inserted, namely:—

"(3A) A company having a paid up share capital of two crore rupees or more but less than five crore rupees may appoint any individual who possesses the qualification of membership of the Institute of Company Secretaries of India constituted under the Company Secretaries Act, 1980 (56 of 1980), as a whole-time secretary to perform the duties of a secretary under the Companies Act, 1956:

Provided that where a company has appointed under sub-rule (3) or this sub-rule, a whole-time company secretary, possessing the qualification of membership of the Institute of Company Secretaries of India, such a company is not required to obtain a certificate from a secretary in whole-time practice under rule 3 of the Companies (Compliance Certificate) Rules, 2001."

Source: http://www.taxmann.net/Datafolder/flash ... 0701_2.htm

Enjoy workin...Vj
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby sourabhacs » Thu Jan 08, 2009 4:54 pm

Dear Friends,

Government has shown the door to all the Company Secretaries who are in job. Now their future is permanently in dark. I think they should change their line to some marketing/sales line etc.

However it is not too good for CS in Practice also because the Compl. Certificate is only on annual basis. Now the Companies with in the bracket of paid up capital of Rs. 2 crores to Rs. 5 crores would like to get Compl. Certificate costing not more than 5000/- Rs. per annum rather than appointing a permanent CS on a salary of Rs. 20,000/- p.m. or Rs. 25,000/ p.m. .

Certainly , Government has kicked the CS to his home. Now the profession of CS is end.

Regards

SOURABH GUPTA
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby Riyas2009 » Fri Jan 09, 2009 12:22 pm

Dear VJKaha, in the 8th line of your reply, it is seen that CC is mandatory if paidup cpl is between 50 lakhs to ............Is it 50 Lakh or present 10 Lakhs..? Pls let me know...

Regards,

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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby pcj_acs » Fri Jan 09, 2009 9:25 pm

SADLY THERE ARE NUMBER OF CS WORKING IN THE COMPANIES HAVING PAID UP CAPITAL OF LESS THAN RS 5 CRORES. SUPPOSE THESE MEMBERS ARE ASKED(WHICH IS A STRONG POSSIBILITY) TO QUIT WHAT OPTION DO THEY HAVE SPECIALLY THOSE WHO ARE IN THE AGE GROUP OF 40 YRS PLUS.MEMBERS ARE REQUESTED TO SUGGEST IDEAS.

WHAT ABT THE CURRENT/PROPOSED PROSPECTUS IN PRACTICE. I DOUBT WHETHER PRACTICE SIDE WILL BOOM BY THIS AMENDMENT AS ICSI HAS TIME AND AGAIN UNSUCCESSFUL IN PROTECTING THE PROFESSION SHOULD IT ATLEAST MAKE STRONG REGULATIONS FOR UNDERCUTTING OF FEE IN PRACTICE AND GET EXCLUSIVE AUTHORISATION FOR PRACTISING CS.


REGARDS

P.C. JOSHI
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby Madhur Agrawal » Sat Jan 10, 2009 11:28 am

There are no chnages in the threshold limit, in case of aquiring Compliance Certificate from PCS.
i.e it is same Rs.10Lakh
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby pca » Sat Jan 10, 2009 3:17 pm

Dear friends,

As per proviso to Sec.383A a co. having paid-up capital of Rs.10 lacs and above but less than Rs.5 crores is now required to file compliance certificate. However, as per the amended Rules if such co. employs wholetime CS, it need not file compliance certificate. This amendment is therefore against the provisions of the Act and needs to be challenged in the court. Rules cannot override the provisions of the Act. Govt. had earlier tried to clarify this through a circular and the court had advised the Govt. to issue exemption notification instead, which was never issued.

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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby prodyut_123 » Mon Jan 12, 2009 5:30 pm

Dear Friends

I have sent the following email to ICSI on 11.01.2009. Members views solicited.


11th January, 2009


The President
The Institute of Company Secretaries of India
New Delhi

Dear Sir

Re: Increase of limit for appointment of Company Secretary - Profession of Company Secretaries.

We are really shocked, disheartened and astonished to see the Governments approach to the profession of Company Secretaries. In spite of protest from ICSI the Government has totally ignored ICSI and has taken the unilateral decision to raise the limit for Compulsory appointment of CS to Rs. 5 crores. In absence of full fledged Secretarial Audit for all Companies such a move will decrease the job market of the CS on one hand and will not significantly increase the scope of practice on the other hand. It could have been a welcome move if the Government first had made it compulsory to have secretarial Audit for all Companies and thereafter increased the limit.

More over a ridicules provision has been incorporated in the Rules wherein a Company having a paid up capital of 2 crore and more but less than 5 crore has appointed a full time Company Secretary, the Company is not required to obtain Compliance Certificate from a Practicing Company Secretary. Can the Government make a rule that a Company having a full time Chartered Accountant / Cost Accountant is exempted from Statutory Audit?

In every matter we have seen the negative approach of the Government toward our profession. On one hand our exclusive areas have been made open to the other professions and the exclusivity of the other professions have been kept intact, if not increased. It appears that the other professions have stronger lobby in the Government and they are getting everything in their favour. In spite of my full confidence on our present Council and the Executives of ICSI, I am compelled to say that we are not getting desired results and recognition.

It is the high time that ICSI should approach the Government to make its intention clear- whether Government wants that the profession should continue or it wants the profession to be abolished. The Government has to be clear and instead of keeping the existing and prospective members in dark the Government should either give proper recognition to the Company Secretaries or abolish the profession.

ICSI has to be very clear to the Government to get a crystal clear message and to circulate the same to the Members, Prospective Members, Students, Prospective Students and public at large so that the persons intending to join CS can take an informed decision. My wordings may sound a little harsh but we have to be harder while demanding our legitimate recognition from the Government. We may also explore the idea of forming joint action committee with other sister professional institute which is also being neglected by the Government to get recognition in some new areas like income tax audit/ service tax audit/ vat audit e.t.c.

Yours faithfully

Prodyut Banerjee
ACS-18125




CC: The Secretary and Chief Executive Officer
The Institute of Company Secretaries of India
New Delhi
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby bbilucs » Tue Jan 13, 2009 10:35 am

Dear All

There is nothing to worry for CS appointment limt increase. In fact, it is not a shocking news, its been discussed for a couple of years. Recently it was felt that the no. of cs is very low, compared to market demand, so MCA in consultation with ICSI decided to increase the limit. I feel, its a good move, though not digesting to some. I feel, In fact, the proposal was to increase to 10 crores., but, by the pressure of ICSI it was limited to 5 crores.

Any profession to be great, must be based on QUALITY. I am sure that a CS who is presently working in a 2.5 crore puc company will not be thrown out by this amendment, IF HE IS ACTUALLY WORTH FOR THE COMPANY. Its not the limit which is to be considered, but, WHAT A CS CONTRIBUTES TO THE COMPANY.

a CS should not be a COST CENTER, but be a Key Personnel, so that you will not even think about the limits or 383A.

Further, look from the other side also, no where in the world there is a concept of practising CS. Only in India. ICSI tried hard to introduce such a market. In 2000 when CC was introduced, other professionals surprised, now, the scope of CC has increased to more than a lac companies, also.

Thus, i feel by this increase in limit to 5 crore:

1. The profession is more glorified, that the service of a CS is required from 10 lacs, scope of PCS increased, and a whole-time CS will be from 5 crores, a more respectable placement.

2. Small companies are releived from the burden of WT CS.

THUS, DONT HANG ON THE LIMITS, BUT, PROVE TO YOUR COMPANY THE ROLE / CONTRIBUTION FROM A CS. THEN, YOU WILL NOT WORRY ON LIMITS....

CS. Balakrishnan Bilu
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby sobti_cs » Tue Jan 13, 2009 11:26 am

As a professional, we must prove that there is a genuine need of CS. We should not depend upon any statutory compulsion on companies to appoint CS.

It's time to prove our worth. If we can't , we should be ready for worse.

Regards,

Anup Sobti
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby vstapadia » Wed Jan 14, 2009 1:48 pm

The growth of the profession has taken place with the statutory obligations put by the Government/ Regulators on the Corporate world/ assesses. It is nice to say that quality will establish the demand, but the fact is quantity of the professionals is necessary for increasing the role of the profession. The only reason appears for this change is low availability of the qualified professionals. While the Institute should take care for increasing the number on one side, the statutory support must be sought for creating demand for the profession. At no time, any of the three profession has grown without the statutory compulsions.
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby sourabhacs » Wed Jan 14, 2009 5:06 pm

Dear all,

I think that Mr. Anup Sobti belongs from other profession also that is why he is talking about quality. He do not know that how much CS are suffering in job and in practice due to lack of govt. support and failure of ICSI.
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby prodyut_123 » Wed Jan 14, 2009 6:21 pm

I completely support Sourav. Our CS profession basically protects the shareholders, banks, governments and public at large and does not provide any undue advantage to the core management team mainly composed of some promoter directors having controll over the Company.It is true that we cant create more money/ business to those members of core management team (n fact it is not and should not be our duty) but at the same time we increase the value of the Company as a whole by protecting all concerned stake holders.Since we can't satisfy the Promoters/ core management we are always unwanted devil to them and they will always try to undermine us and accordingly we need more statutory protection to carry out our functions properly.It is upto the Government that whether it wants to protect the interest of the promoters (so called owner) of the Company or the interest of all the stake holders. In case of later it has to give more and more recognisation to us and make such stringent provisions that we can independently carry our duty even if the same is not very much acceptable to the promoters/ a close group of top management.The appointment of both Employee Company Secretary and practicing Company Secretary shopuld be made only by Share holders resolution and the removal must require special resolution and permission from the Government.
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby pcj_acs » Wed Jan 14, 2009 9:46 pm

I fully agree with Saurabh.



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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby sumedhadublish » Thu Jan 15, 2009 5:53 pm

Dear friends,

Now the limit has been changed despite of our Institute Protest..
In the current scenario of recession and cost cutting it will really makes the sitaution worse for us. It will give right to small companies to retrench the CS. I do agree with the view that we are not dependent on the Section 383A for creating our value but atleast it helps in getting entry in the corporate sector. Plz think about freshers they will definitely find difficulty in finding jobs since bigs company usually wants experienced persons and small companies after this amendment need not to appoint a CS.
Lets see what will happen after this amendment comes into effect. Nothing else we can do...
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby sbanik_cs » Fri Jan 16, 2009 11:30 am

Dear All,

I agree with the majority views that our profession require more supports from the Govt. to grow, which directly and indirectly help to create a more compliance friendly corporate culture. Further, I strongly believe that our profession has the potential to prevent another Satyam like situation. There should be a highly placed official, inside the company, to check, verify and advise the Board of Directors regarding the various compliance needs and changes thereof and implication of non-compliance thereof. Apart that, In this current scenario of recession, such a regulation may result downward movement of the profession.

Thanks,
CS Siddhartha Banik
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Query:Paid-up capital limit for CS apptmt raised to Rs.5 cro

Postby christabelle » Wed Jan 21, 2009 2:33 pm

Dear friends,

Could anyone clarify if paid-up capital in the appt of co. secy rules refers to equity capital or inclusive of other classes of capital.
Regards
Christabelle
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Re: Paid up capital limit for CS apptmt raised to Rs.5 crores

Postby ulhas bhat » Thu Jan 22, 2009 10:08 am

Hi Christabelle,
The expression "paid-up share capital" is inclusively defined in section 2(32) of Co Act 1956 as including capital credited as paid-up. It means that portion of the subscribed capital, whether equity, preference or any other, in respect of which the company has either received cash or any other consideration against which the capital has been credited.
Hence it includes both preference and equity.
Regards,
CS Ulhas Sodankoor Bhat
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