Podcast
Questions and Answers
Who is responsible for certifying the correct copies delivered to the Registrar?
Who is responsible for certifying the correct copies delivered to the Registrar?
- The Auditors
- The Registrar of Companies
- Two Directors of the company (correct)
- The Company Secretary
What must the Board of every company prepare within six months after the balance sheet date?
What must the Board of every company prepare within six months after the balance sheet date?
- A financial projection for the next year
- A balance sheet summary
- A director's personal report
- An annual report on the company’s affairs (correct)
What is the maximum fine a Director can face for failing to comply with preparing the annual report?
What is the maximum fine a Director can face for failing to comply with preparing the annual report?
- Fifty thousand rupees
- One hundred thousand rupees (correct)
- Ten thousand rupees
- Two hundred thousand rupees
Under what condition can the Company Secretary be held liable for defaults?
Under what condition can the Company Secretary be held liable for defaults?
What does the principle of law state about insuring against illegal acts?
What does the principle of law state about insuring against illegal acts?
When is failure to deliver accounts and annual returns considered an offence?
When is failure to deliver accounts and annual returns considered an offence?
What contractual liabilities does a company secretary have?
What contractual liabilities does a company secretary have?
What is typically the Registrar of Companies' approach regarding company secretaries?
What is typically the Registrar of Companies' approach regarding company secretaries?
What is one of the primary responsibilities of a company secretary under the Companies Act?
What is one of the primary responsibilities of a company secretary under the Companies Act?
Which of the following can the company secretary be liable for under the Companies Act?
Which of the following can the company secretary be liable for under the Companies Act?
In what capacity does a company secretary act within the organization?
In what capacity does a company secretary act within the organization?
What action may lead to penal liabilities for a company secretary?
What action may lead to penal liabilities for a company secretary?
What must a company secretary do to avoid misfeasance proceedings during a winding-up process?
What must a company secretary do to avoid misfeasance proceedings during a winding-up process?
Under the Companies Act No.7 of 2007, who holds the responsibility to appoint a Secretary for a company?
Under the Companies Act No.7 of 2007, who holds the responsibility to appoint a Secretary for a company?
Which of the following is NOT a function of the company secretary?
Which of the following is NOT a function of the company secretary?
What is a condition that must be fulfilled for a person to be appointed as a Secretary of a company?
What is a condition that must be fulfilled for a person to be appointed as a Secretary of a company?
How is the company liable for the acts of its secretary?
How is the company liable for the acts of its secretary?
When does a person named as the Secretary in an incorporation application actually hold office?
When does a person named as the Secretary in an incorporation application actually hold office?
What is a potential consequence of a company secretary falsifying documentation?
What is a potential consequence of a company secretary falsifying documentation?
Which of the following actions can lead to personal liability for a director?
Which of the following actions can lead to personal liability for a director?
What is required for a person to be eligible to be a Secretary in a company with significant turnover?
What is required for a person to be eligible to be a Secretary in a company with significant turnover?
What happens if a director acts beyond their authority?
What happens if a director acts beyond their authority?
In the case of fraud committed by assistants, what must be proved for the director to be held liable?
In the case of fraud committed by assistants, what must be proved for the director to be held liable?
What is one major responsibility of the Secretary according to the Companies Act?
What is one major responsibility of the Secretary according to the Companies Act?
Study Notes
Company Secretary Responsibilities and Liabilities
- Copies delivered to the Registrar must be certified by two Directors or a single Director if only one exists.
- Annual reports must be prepared by the Board within six months after the balance sheet date, covering company affairs during the financial period.
- Directors neglecting to prepare the annual report may face fines up to one hundred thousand rupees.
- The Company Secretary also bears responsibility for compliance and can incur fines similar to Directors for defaults.
Compliance with the Companies Act
- Liability insurance does not cover illegal acts; personal assets may be at risk for damages.
- A Company Secretary is liable if found in default or knowingly allowing defaults; ignorance is not an excuse.
- The Registrar does not typically pursue sanctions against the Company Secretary unless he also holds the Director position.
- Timely delivery of accounts and annual returns is obligatory; failing to do so is considered an offence.
Contractual Liabilities of the Company Secretary
- Acting within the scope of authority, in good faith and with due care, protects the Company Secretary from personal liability.
- Personal liability arises from willful negligence, misconduct, or fraud related to duties performed within their employment.
- Overstepping authority results in personal liability for losses incurred by the company or third parties.
- A Company Secretary is not liable for fraud committed by subordinates unless his ignorance is proven.
Qualifications and Appointment
- Each company must have a Secretary, appointed under conditions specified in the Companies Act.
- A designated Secretary must consent and certify qualifications in the prescribed format.
- The Board has the authority to appoint or remove the Secretary unless otherwise stated in the company’s articles.
Role and Status of the Company Secretary
- The Secretary for companies with significant turnover must meet certain prescribed qualifications due to the nature of their duties.
- Unlike directors, the Secretary acts as an agent in a servant capacity, limited to authority granted by directors.
- The Secretary is considered an officer of the company and may face statutory penalties for non-compliance.
Legal Accountability and Consequences
- The Secretary may face imprisonment for falsifying company records or making material false statements in essential documents.
- In cases of winding up, vis-a-vis misfeasance, the Secretary can be charged for misapplying company assets or breach of trust.
- Statutory obligations include holding meetings, filing reports, and registering resolutions, for which liability can incur.
Summary of Legal Provisions
- The Company Secretary has defined responsibilities and liabilities under the Companies Act, ensuring adherence to legal and regulatory standards.
- Understanding these provisions is crucial for compliance and safeguarding personal and corporate interests.
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Description
This quiz assesses your understanding of the roles and legal responsibilities of a Company Secretary under the Companies Act. It covers key aspects such as compliance, liabilities, and the consequences of defaults. Test your knowledge on the importance of timely reporting and accountability within corporate governance.
