Role of Company Secretary in Every Stage of Company Formation

The role of  company secretary has great importance in every stage of company formation. A secretary plays a vital role in the company. Primarily we can differentiate the role of company secretary in three-step which is discussed below:

The overall role of the company secretary can be divided into three (3) types:

  1. Role of company secretary before incorporation.
  2. Role of company secretary after incorporation.
  3. Routine Role of the company secretary.

The above role described below:

A. Role of company secretary before incorporation

Here the company secretary performs the following functions related to incorporation:

  1. Make an arrangement of meeting for the promoters.
  2. Submitting necessary forms and documents to the registrar of the joint-stock company for getting a certificate of incorporation, Prepare Memorandum and Articles of Association as per company Act 1994.

B. Role of company secretary after incorporation

Here the company secretary requires performing the below functions:

  1. Arrange a meeting for the board of directors.
  2. Prepare and circulate prospectus.
  3. Collecting certificate of commencement from the registrar of a joint-stock company,
  4. Arrange a statutory meeting, prepare a statutory report, and file a copy of such report with the registrar of the company.

C. Routine Role of company secretary

Such functions are regular in nature towards the following stakeholders:

1. Functions to Wards Company: These functions are set as per company Act 1994, and other related laws, which are:

  • Comply with the rules of company Act 1994; stamp Act and Income Tax Act.
  • Sign the Annual Report.
  • Maintenance of statutory books or different registers of the company.
  • Preparation, validation, and filing of resolutions, agreements, documents, notices, and various returns with the company Registrar.
  • Attending the meetings and record their proceedings.
  • Keep the common seal in safe custody.

The image given below will give a clear-cut idea about the role of company secretary.

Role of Company Secretary
Role of Company Secretary

2. Role towards directors: Company secretary performs as a spokesman of the board of directors such as:

  • Make sure that all actions of the board of directors are in accordance with the company’s memorandum and articles of association.
  • Deal with the correspondence as per instruction from the directors.
  • Provide necessary advice and information to the board to formulate company policy.
  • Arrange board meetings, issuing notice, and preparing the agenda of such meetings, also recording the minutes and resolutions of the meeting.
  • Draft the director’s report and presenting it in the annual general meeting in favor of the directors.

3. Role towards shareholders: Company secretary executes the following functions for shareholders:

  • Circulate prospectus, invite and receive share application. Issue allotment letter and share – certificates and arrange distribution of dividend warrants to the shareholders.
  • Sending notice and agenda to the ‘shareholders for their respective meetings and make arrangements to hold the meeting.
  • Record the proceedings of the meeting in the minute’s book.
  • Allowing shareholders to inspect various books and registers as permissible under the company Act 1994.
  • Communicate the decisions of the board of directors to the shareholders and deal with the query and complaints of the shareholders.
  • Protect the interest of the shareholders.

4. Role related to meeting: Company secretary plays an important role to hold various meeting, such as:

  • Select the appropriate place for the meeting.
  • Sending notice and agenda of the meeting to the participant.
  • Examining the proxy form.
  • Announcing the agenda before the meeting.
  • Assist the chairman to conduct the meeting.
  • Record and maintain the minutes of the meeting.

5. Role as a liaison officer: As a liaison officer, a company secretary has to:

  • Maintain liaison between the board of directors and various employees of the company,
  • Ensure link between company and stakeholders like shareholders and creditors,
  • Circulate orders or instructions at various levels of the company and escalate insights & opinions to the top level.

6. Roles as an administrative officer: Duties towards the office and staff company secretary is a high profile administrative officer of the company and therefore he needs to:

  • Supervise and coordinate the activity of various departments like share department, correspondence department, accounts department, filings record department, etc.
  • Act like a friend and guide to the staff and ensure equal opportunity for all.
  • Handle with query complaints of the staff.

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