The Ministry of Corporate Affairs has vide notification dated January 5, 2009 [please refer to the text below] has raised the limit of paid up share capital for compulsory appointment of a company secretary (under wholetime employment) in an Indian company, from Rs. 2 crores to Rs. 5 crores.
This notification shall come into force from the 15th day of March, 2009.
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."
Showing posts with label Companies Act. Show all posts
Showing posts with label Companies Act. Show all posts
Thursday, January 08, 2009
Companies [Appontment and Qualifications of Secretary] Amendment Rules, 2009 [India]
Wednesday, January 07, 2009
Raju, Satyam Directors could face a ten-year jail term [India]
A team of officials from market regulator Securities and Exchange Board of India (SEBI) will arrive in Hyderabad on Thursday to begin a probe amid speculation that police might arrest Mr. Raju, but nobody knows his whereabouts. Mr. Raju became incommunicado after sending a letter to the Satyam Board of Directors on Wednesday morning. There was utter confusion after a TV channel reported that he had left either for the US or Dubai.
Mr. Raju is believed to have met nobody in the last two days. It is also possible that he might have handed over his letter to company officials before becoming incommunicado.
Some of the more serious penalties that Raju and others are likely to face under various laws are:
* Section 23 of the securities contract regulation Act 1956, that imposes a penalty of imprisonment up to 10 years and fine up to Rs 25 crore. The adjudicating officer of Sebi is empowered to award such punishment to directors and management executives for violating the listing agreement by making false and inaccurate disclosures in the company's quarterly and annual results. The penalty is severe because of the enormous damage that the investors are liable to suffer on account of false disclosures.
* Section 24 of the Sebi Act 1992 that imposes a penalty of imprisonment up to one year for infringement of any provisions of the law or rules and regulations, including fraudulent and unfair trade practices (FUTP).
* Section 477-A of the Indian Penal Code, that imposes a penalty of imprisonment up to seven years. The police may on their own or on the recommendation of the serious fraud investigation office (SFIO) invoke this IPC provision meant to punish those found to have falsified accounts "...willfully and with intent to defraud."
* Section 211 of the Companies Act that imposes a penalty of imprisonment up to six months. The company law board is empowered to punish those who are found to have "willfully" failed to comply with the requirements of law relating to the annual financial statement.
Significantly, the job of the prosecuting agencies has been made easier by the damaging admissions made by Raju in his resignation letter to the board. Having taken responsibility for cooking the Satyam books to the tune of Rs 7,136 crore, it is just as well that Raju said, "I am now prepared to subject myself to the laws of the land and face the consequences thereof." For all his exertions in his resignation letter to save the skin of other directors, they have reason to worry because the Companies Act does not only hold the board to account for any such failure of due diligence, it also makes no distinction in the liability of executive and non-executive or independent directors. The onus is on them to prove the action they had taken to discharge their fiduciary responsibility.
Mr. Raju is believed to have met nobody in the last two days. It is also possible that he might have handed over his letter to company officials before becoming incommunicado.
Some of the more serious penalties that Raju and others are likely to face under various laws are:
* Section 23 of the securities contract regulation Act 1956, that imposes a penalty of imprisonment up to 10 years and fine up to Rs 25 crore. The adjudicating officer of Sebi is empowered to award such punishment to directors and management executives for violating the listing agreement by making false and inaccurate disclosures in the company's quarterly and annual results. The penalty is severe because of the enormous damage that the investors are liable to suffer on account of false disclosures.
* Section 24 of the Sebi Act 1992 that imposes a penalty of imprisonment up to one year for infringement of any provisions of the law or rules and regulations, including fraudulent and unfair trade practices (FUTP).
* Section 477-A of the Indian Penal Code, that imposes a penalty of imprisonment up to seven years. The police may on their own or on the recommendation of the serious fraud investigation office (SFIO) invoke this IPC provision meant to punish those found to have falsified accounts "...willfully and with intent to defraud."
* Section 211 of the Companies Act that imposes a penalty of imprisonment up to six months. The company law board is empowered to punish those who are found to have "willfully" failed to comply with the requirements of law relating to the annual financial statement.
Significantly, the job of the prosecuting agencies has been made easier by the damaging admissions made by Raju in his resignation letter to the board. Having taken responsibility for cooking the Satyam books to the tune of Rs 7,136 crore, it is just as well that Raju said, "I am now prepared to subject myself to the laws of the land and face the consequences thereof." For all his exertions in his resignation letter to save the skin of other directors, they have reason to worry because the Companies Act does not only hold the board to account for any such failure of due diligence, it also makes no distinction in the liability of executive and non-executive or independent directors. The onus is on them to prove the action they had taken to discharge their fiduciary responsibility.
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