A company that contravenes the provisions shall be punishable with fine which shall not be less than Rs 1 lakh.
Guwahati: The Federation of Industry and Commerce of North East Region (FINER) has requested the ministry of corporate affairs (MCA) to look into its stringent provision of appointment of full-time company secretaries (CS) as there is not enough people who hold the degree and willing to work in companies.
In a pre-budget discussion with the ministry of corporate affairs, the FINER stated, “Our members and other units in the Northeast are finding it impossible to be compliant, and are unable to file balance sheets and documents.”
The FINER pointed out, “The debilitating provisions, which now find impossibility for performance is the appointment of full-time company secretaries with paid up share capital of Rs 5 crores. There are just not enough people in the Northeast who hold the degree and are willing to work in companies. As a result, even for name lending charges of more than Rs 4-5 lakh is being sought, and even then, the number of company secretaries required is much more than the supply thereof.”
The body added that pursuant to Section 203 (5) of the Companies Act, 2013, every listed company and other companies with a paid-up share capital of Rs 5 crore and above shall compulsorily appoint a whole-time CS.
A company that contravenes the provisions relating to appoint of Key Managerial Personnel (KMP) shall be punishable with fine which shall not be less than Rs 1 lakh which may extend up to Rs 5 lakhs and every director and other KMP who is in default shall also be punishable with fine which may extend up to Rs 1,000 for every day after the first during which the default continues.
The FINER which has submitted a written memorandum to the ministry, stated, “It has been the banks that have been insisting that the businesses be corporatised and that has been the reason why most corporates in the region were formed. These companies otherwise do not deal with public funds apart from Bank facilities.”