11th-commerce-SP-textbook 1st chapter -pdf.pdf

INDEX No. Chapter Page No. 1 Secretary 1 2 Joint Stock Company 16 3 Formation of a company...

INDEX No. Chapter Page No. 1 Secretary 1 2 Joint Stock Company 16 3 Formation of a company 33 4 Documents related to formation of a company 48 5 Members of a company 67 6 Directors and Key Managerial personnel of a company 77 7 Company Meetings - I 102 8 Company Meetings - II 121 9 Business Communication Skills of Secretary 134 10 Correspondence with Directors 149 11 Correspondence with Banks 158 12 Correspondence with Statutory Authorities 173 Answer Keys 186  1 SECRETARY 1.1 Origin of Secretary  0HDQLQJDQG'H¿QLWLRQ 1.3 Features 1.4 Importance 1.5 Types 1.5.1 Personal Secretary 1.5.2 Institutional Secretary   ‡6HFUHWDU\RI1RQSUR¿W$VVRFLDWLRQ Secretary of Co-operative society Secretary of Joint Stock Company Secretary of Government Department 1.6 Functions of Secretary 1.7 Qualities of Secretary 1.8 Distinction INTRODUCTION: The Indian economy is fast developing and has fastest growing service sector in the world. Various forms of organizations have emerged in the present economic situation. Finance is needed to establish a business, run it, to modernize it, expand it and diversify it. 7KHUROHRI¿QDQFLDOPDQDJHPHQWKDVEHFRPHLPSRUWDQWWRWKHFRUSRUDWHZRUOG([SHUWLQGLYLGXDOV having special capabilities and knowledge to grow business have now become important for our present Indian business scenario. The profession of Secretary is one such profession which caters to the changing demands of businessmen and organizations. The subject ‘Secretarial Practice’ deals with the origin, importance, features, types, appointment, TXDOLWLHVTXDOL¿FDWLRQVIXQFWLRQVGXWLHVRIGLIIHUHQWW\SHVRIVHFUHWDULHVWKHIXQFWLRQLQJRIMRLQW stock company etc. 1.1 ORIGIN OF SECRETARY Until the late 19th century, persons involved in the daily correspondence and the activities UHODWHGWR¿QDQFHKDGDVVXPHGWKHWLWOHµ6HFUHWDU\¶ The Latin words ‘secretum’ or ‘secretus’ which means the secrets. The word Secretary is derived from the Latin word ‘Secretarius’ which means someone who works for a person of great importance. 1  ,QWKH5RPDQWLPHVµ6FULEDH¶ZDVDSURIHVVLRQDOOHWWHUZULWHURURQHZKRPDLQWDLQVFRQ¿GHQWLDO records. ,Q DQFLHQW ,QGLDQ KLVWRU\ 6HFUHWDU\ ZDV UHIHUUHG WR DV$PDW\D 6DFKLYD RU &KLWQLV ZKLFK means a person who does secretarial work. Today, the State and Central Governments also have secretaries for various departments functioning under the control of ministries in the Sachivalaya. Origin Former names for Meaning Secretary Latin language Secretarius $ FRQ¿GHQWLDOZULWHURU RI¿FHUZLWKZKRP secrets are entrusted by employer. 5RPDQ(PSLUH Scribae $ SURIHVVLRQDO OHWWHU ZULWHU RU RQH ZKR PDLQWDLQVFRQ¿GHQWLDOUHFRUGV Indian history $PDW\D6DFKLYD&KLWQLV $SHUVRQZKRGRHVVHFUHWDULDOZRUN Additional information: In 1870 Sir Isaac Pitman founded a school where students could qualify as professional writers. In 1888, with the invention of typewriters, the role of secretary increased. In an HIIRUW WR SURPRWH SURIHVVLRQDOLVP WKH 1DWLRQDO 6HFUHWDULHV $VVRFLDWLRQ ZDV FUHDWHG LQ LQWKH86$/DWHUDVSHFLDO6HFUHWDULHV'D\ZDVFUHDWHGZKLFKZRXOGEHLQWKHODVW ZHHNRI$SULO7KLVZHHNLVQRZNQRZQDV$GPLQLVWUDWLYH3URIHVVLRQDO¶V:HHN 1.2 MEANING AND DEFINITION 7KHUHDUHYDULRXVGH¿QLWLRQVRI6HFUHWDU\VRPHRIWKHPDUHDVIROORZV    7KH2[IRUG'LFWLRQDU\GH¿QHVD6HFUHWDU\DVµ$SHUVRQZKRVHZRUNLVWRZULWHIRURWKHUV especially one who is employed to conduct correspondence, keep records and to transact various other businesses for another person or for a society, corporation or public body.’    $FFRUGLQJ WR &RPSDQLHV $FW  6HFWLRQ    µµ&RPSDQ\ 6HFUHWDU\ RU 6HFUHWDU\ PHDQVD&RPSDQ\6HFUHWDU\DVGH¿QHGLQ&ODXVH F RI6XEVHFWLRQ L RI6HFWLRQRIWKH &RPSDQ\6HFUHWDULHV$FWZKRLVDSSRLQWHGE\DFRPSDQ\WRSHUIRUPWKHIXQFWLRQRI D&RPSDQ\6HFUHWDU\XQGHUWKLV$FW¶¶   7KH&RPSDQ\6HFUHWDULHV$FWGH¿QHV&RPSDQ\6HFUHWDU\DV³DSHUVRQZKRLVD member of Institute of Company Secretaries of India.” )URPWKHDERYHGH¿QLWLRQVLWFDQEHVWDWHGWKDW6HFUHWDU\LVDSSRLQWHGWRHQVXUHWKHVPRRWK functioning of the organization and assists in various functions related to correspondence, meetings, record keeping and any such administrative work. 2 1.3 FEATURES OF SECRETARY FEATURES OF SECRETARY Individual Qualities Representative Duties 4XDOL¿FDWLRQ &RQ¿GHQWLDO $SSRLQWPHQW Paid RI¿FHU employee 1) Individual :2QO\DQLQGLYLGXDODORQHFDQEHDSSRLQWHGDVD6HFUHWDU\$¿UPDQLQVWLWXWLRQ RUDFRUSRUDWHERG\FDQQRWEHDSSRLQWHGDVD6HFUHWDU\$6HFUHWDU\KDVWREHDQLQGLYLGXDO DVSHUWKHSURYLVLRQVRIWKH&RPSDQ\/DZDQGDOVRGXHWRWKHVNLOOVUHTXLUHGWRIXO¿OOWKH duties and responsibilities towards the employers. 2) Duties : $ 6HFUHWDU\ KDV WR SHUIRUP URXWLQH DQG DGPLQLVWUDWLYH GXWLHV VXFK DV correspondence, conducting meetings, maintaining records and providing information. 6HFUHWDU\DOVRKDVWRIXO¿OOWKHGD\WRGD\URXWLQHGXWLHVUHODWHGWRZDUGVWKHHPSOR\HU RURUJDQL]DWLRQVXFKDVFOHULFDOZRUNUHFRUGLQJ¿[LQJDSSRLQWPHQWVJLYLQJUHPLQGHUV replying to other employees queries etc. These duties vary according to the nature of work of the organization or employer. In recent time, Secretary has to ensure legal compliances. 3) 4XDOL¿FDWLRQ(YHU\6HFUHWDU\PXVWSRVVHVVFHUWDLQTXDOLWLHVDQGTXDOL¿FDWLRQVDVSHU the organization. However, a person who is appointed as a Company Secretary in a public RUSULYDWHOLPLWHGFRPSDQ\QHHGVWRKDYHFHUWDLQSUHVFULEHGTXDOL¿FDWLRQVDFFRUGLQJWR &RPSDQLHV$FW6LPLODUO\D6HFUHWDU\RID*RYHUQPHQW'HSDUWPHQWQHHGVWRKDYH WKHTXDOL¿FDWLRQVDVSHUWKH*RYHUQPHQWUXOHVDQGUHJXODWLRQV 4) Appointment : $ 6HFUHWDU\ FDQ EH DSSRLQWHG E\ LQGLYLGXDOV SURIHVVLRQDOV VRFLHW\ corporation, government, public organization, Joint stock companies etc. In other words a Secretary can be a personal or institutional Secretary. 5) Paid employee :$6HFUHWDU\LVDSDLGHPSOR\HHRIWKHRUJDQL]DWLRQ6HFUHWDU\LVHLWKHU JLYHQ D VDODU\ RU SDLG DQ KRQRUDULXP$OWKRXJK 6HFUHWDU\ LV D SDLG HPSOR\HH \HW WKH Secretary holds an important position in the organization. Honorarium : A fee or a payment given to a professional person for services rendered. 6) &RQ¿GHQWLDORI¿FHU $6HFUHWDU\LVDFXVWRGLDQRIVHFUHWDQGFRQ¿GHQWLDOLQIRUPDWLRQ of the organization. Secretary is closely connected to the top management and can be involved in policy decisions. 7) Representative : $ 6HFUHWDU\ DFWV DV D UHSUHVHQWDWLYH RI WKH RUJDQL]DWLRQ *HQHUDOO\ VHFUHWDULHV DUH RI WZR W\SHV D  3HUVRQDO E  ,QVWLWXWLRQDO 6HFUHWDULHV DSSRLQWHG E\ individuals are known as personal secretaries. These secretaries represent their employers.   Institutional secretaries are appointed by societies, companies, government departments and represent their organizations. 8) Qualities :$6HFUHWDU\VKRXOGSRVVHVVFHUWDLQTXDOLWLHVVRDVWRFRQGXFWWKHVHFUHWDULDO duties smoothly. The qualities like concentration, intelligence, tact, loyalty, co-operation, FRXUWHV\ OHDGHUVKLS RUGHUOLQHVV DQG NQRZOHGJH VHHNHU DVVLVW LQ VPRRWK DQG HI¿FLHQW working of the organization. 1.4 IMPORTANCE OF A SECRETARY I M ([SHUWDGYLFHDQGJXLGDQFH P $GPLQLVWUDWRU O Custodian of secret information R Correspondent T /HJDOFRPSOLDQFHRI¿FHU A Conducting meetings N Link between management and staff )XO¿OOPHQWRI6HFUHWDULDOVWDQGDUGVDQGVHFUHWDULDODXGLW C E In modern times a Secretary has greater status and importance in an organization. This is because of the ever changing and never ending demands of today’s business world. 7KHQHHGDQGLPSRUWDQFHRID6HFUHWDU\FDQEHKLJKOLJKWHGZLWKWKHIROORZLQJSRLQWV 1) Expert advice and guidance : The Secretary advices the superiors on various important LVVXHVDQGDVVLVWVLQ¿QDOL]LQJGHFLVLRQVRQYDULRXVLVVXHV7KHYLHZVREVHUYDWLRQVDQG opinions of the Secretary are always considered valuable while taking appropriate policy decisions. The Secretary provides able guidance to the management and helps to achieve expected growth of the business. 2) Administrator : $ 6HFUHWDU\ ORRNV DIWHU WKH URXWLQH RI¿FH DGPLQLVWUDWLRQ RI WKH RUJDQL]DWLRQ 6HFUHWDU\ KDQGOHV HI¿FLHQWO\ URXWLQH DV ZHOO DV H[HFXWLYH GXWLHV RI WKH RUJDQL]DWLRQ5RXWLQHGXWLHVOLNHRI¿FHPDQDJHPHQWGRFXPHQWDWLRQRILPSRUWDQWLVVXHV DWWHQGLQJYLVLWRUVHWFDUHKDQGOHGE\WKH6HFUHWDU\HI¿FLHQWO\6HFUHWDU\DOVRKDQGOHVWKH executive duties like assisting policy formulation, preparation of plans, supervision on execution of plans, etc. 3) Custodian of secret information : Secretary is an important person of the organization. 6HFUHWDU\KDVDFFHVVWRFRQ¿GHQWLDODQGFUXFLDOLQIRUPDWLRQUHODWHGWRWKHRUJDQL]DWLRQ 6HFUHWDU\LVDOVRLQYROYHGLQPDNLQJDQGH[HFXWLQJLPSRUWDQWGHFLVLRQV$OOVXFKLPSRUWDQW GHFLVLRQVUHJDUGLQJEXVLQHVVDFWLYLWLHVDUHUHTXLUHGWREHPDLQWDLQHGFRQ¿GHQWLDO6HFUHWDU\ guards the secrets of the organization and does not disclose it to anyone unless required DQGDXWKRUL]HGWRGRVR7KHUHIRUH6HFUHWDU\LVRIWHQUHIHUUHGWRDVµFRQ¿GHQWLDORI¿FHU¶ 4) Correspondent : The Secretary is a correspondent of the organization and is therefore responsible for inward and outward correspondence. Secretary conducts correspondence with members, directors, banks, insurance companies, Registrar, Government authorities, customers, etc. 4  5) /HJDOFRPSOLDQFHRI¿FHU The Secretary has to ensure proper and timely legal compliances in all activities of the organization. Secretary has to perform various statutory duties. 6HFUHWDU\ KDV WR PDLQWDLQ ERRNV UHJLVWHUV HWF DV SUHVFULEHG E\ &RPSDQLHV$FW  6HFUHWDU\KDVWR¿OHUHWXUQVGRFXPHQWVZLWKSURSHUDXWKRULWLHVZLWKLQWKHVWLSXODWHGWLPH 6) Conducting Meetings : (YHU\ EXVLQHVV RUJDQL]DWLRQ KDV WR FRQGXFW PHHWLQJV ZKHUH WKHSHUVRQVPHHWDQG¿QDOL]HLPSRUWDQWGHFLVLRQV7KH6HFUHWDU\FDUULHVRXWIRUPDOLWLHV which are required to be undertaken before, during and after the meeting which includes preparation of agenda, sending notices, preparing minutes etc. 7) Link between management and staff :$6HFUHWDU\DFWVDVDOLQNEHWZHHQPDQDJHPHQW and staff of the organization and helps in effective communication. It is important that these decisions are co-ordinated effectively at all levels of the organization. 8) )XO¿OOPHQW RI 6HFUHWDULDO 6WDQGDUGV DQG 6HFUHWDULDO $XGLW  Secretarial Standards DQG$XGLWDLPDWFKHFNLQJZKHWKHUWKHFRPSDQ\LVDGKHULQJWRWKHOHJDODQGSURFHGXUDO requirements. (Secretarial Standards and Secretarial Audit (SS and SA) are discussed in Chapter 6) 1.5 TYPES OF SECRETARY The growth of industrialization and modernization has lead to an increase in various types of RUJDQL]DWLRQV(YHU\RUJDQL]DWLRQWKHUHIRUHUHTXLUHVRQHVXFKSHUVRQRQZKRPWKHLQGLYLGXDOV or organizations can entrust the person with responsibilities. The concept of Secretary has H[SDQGHGDQGLVUHTXLUHGE\DOPRVWDOOW\SHVRIRUJDQL]DWLRQV(DFK6HFUHWDU\SHUIRUPVWKH duties and responsibilities of the organization or employer. )ROORZLQJVDUHWKHYDULRXVW\SHVRIVHFUHWDULHV TYPES OF SECRETARY Personal Institutional Secretary Secretary 1. Secretary of a   1RQSUR¿WDVVRFLDWLRQ 2. Secretary of a Co-operative society  6HFUHWDU\RID Joint Stock company 4. Secretary of a Government Department 5. Other Body Corporates 5 1.5.1 Personal Secretary  7KHSHUVRQDO6HFUHWDU\RU3HUVRQDO$VVLVWDQWLVWKHROGHVWW\SHRI6HFUHWDU\$SHUVRQDO6HFUHWDU\ is one who is appointed by busy individuals like industrialists, businessmen or professionals to conduct the correspondence and the day to day routine duties. Appointment : Busy individuals appoint secretaries to look after other work so as to enable WKHP WR FRQFHQWUDWH RQ WKHLU SULPDU\ ZRUN HJ 'RFWRUV /DZ\HUV (QJLQHHUV &$ DFWRUV politicians, leaders, ministers etc. 4XDOL¿FDWLRQV $SHUVRQDO6HFUHWDU\DVVXFKKDVQRVSHFL¿FTXDOL¿FDWLRQV