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COMPANY SECRETARIES ACT, 1980
[Act No. 56 of Year 1980]
An Act to make provision for the regulation and development of the profession of company secretaries
Be it enacted by Parliament in the Thirty-first Year of the Republic of India as follows: -
SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT
(1) This Act may be called the Company Secretaries Act, 1980.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
SECTION 02: DEFINITIONS AND INTERPRETATION
(1) In this Act, unless the context otherwise requires,-
(a) "associate" means an associate member of the Institute;
(b) "Companies Act" means the Companies Act, 1956 (1 of 1956);
(c) "company secretary" means a person who is a member of the Institute;
(d) "council" means the Council of the Institute constituted under section 9;
(e) "dissolved company" means the Institute of Company Secretaries of India registered under the Companies Act;
(f) "fellow" means a fellow member of the Institute;
(g) "institute" means the Institute of Company Secretaries of India constituted under this Act;
(h) "prescribed" means prescribed by regulations made under this Act;
(i) "President" means the President of the Council;
(j) "register" means the register of members of the institute maintained under this Act:
(k) "Vice-President" means the Vice-President of the Council;
(l) "year" means the period commencing on the 1st day of April of any year and ending on the 31st day of March of the succeeding year;
(m) words and expressions used herein and not defined but defined in the Companies Act shall have the meanings respectively assigned to them in that Act.
(2) Save as otherwise provided in this Act, a member of the Institute shall be deemed "to be in practice" when, individually or in partnership with one or more members of the Institute in practice or in partnership with members of such other recognised professions as may be prescribed, he, in consideration of remuneration received or to be received-
(a) engages himself in the practice of the profession of Company Secretaries to, or in relation to, any company; or
(b) offers to perform or Performs services in relation to the promotion, forming, incorporation, amalgamation, reconstruction, reorganisation or winding up of companies; or
(c) offers to perform or performs such services as may be performed by-
(i) an authorised representative of a company with respect to filing, registering, presenting, attesting or verifying any documents (including forms, applications and returns) by or on behalf of the company,
(ii) a share transfer agent,
(iii) an issue house,
(iv) a share and stock broker,
(v) a secretarial auditor or consultant,
(vi) an adviser to a company on management, including any legal or procedural matter falling under the Capital Issues (Control) Act, 1947 (29 of 1947), the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), any of the rules or bye-laws made by a recognised stock exchange, the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969), the Foreign Exchange Regulation Act, 1973 (46 of 1973), or under any other law for the time being in force,
(vii) issuing certificates on behalf of, or for the purposes of, a company; or
(d) holds himself out to the public as a company secretary in practice; or
(e) renders professional services or assistance with respect to matters of principle or detail relating to the practice of the profession of Company Secretaries; or
(f) renders such other services as, in the opinion of the Council, are or may be rendered by a Company Secretary in practice;
and the words "to be in practice", with their grammatical variations and cognate expressions, shall be construed accordingly.
SECTION 03: INCORPORATION OF THE INSTITUTE
(1) All persons whose names are entered in the register of the dissolved company immediately before the commencement of this Act and all persons who may hereafter have their names entered in the register to be maintained under this Act, so long as they continue to have their names borne on the register to be maintained under this Act, are hereby constituted a body corporate by the name of the Institute of Company Secretaries of India and all such persons shall be known as members of the Institute.
(2) The Institute shall have perpetual succession and a common seal and shall have power to acquire, hold and dispose of property, movable or immovable and shall by its name sue or be sued.
SECTION 04: ENTRY OF NAMES IN THE REGISTER
(1) Any of the following persons shall be entitled to have his name entered in the register, namely,-
(a) any person who immediately before the commencement of this Act was an associate or a fellow (including an honorary fellow) of the dissolved company;
(b) any person who is a holder of the diploma in company secretary ship awarded by the Government of India;
(c) any person who has passed the examinations conducted by the dissolved company and has completed training either as specified by the dissolved company or as prescribed by the Council, except any such person who is not a permanent resident of India;
(d) any person who has passed such examination and completed such training, as may be prescribed for membership of the Institute;
(e) any person who has passed such other examination and completed such other training without India as is recognised by the Central Government or the Council as being equivalent to the examination and training prescribed under this Act for membership of the Institute:
PROVIDED that in the case of any person belonging to any of the classes mentioned in this sub-section who is not permanently residing in India, the Central Government or the Council may impose such further conditions as it may deem to be necessary or expedient in the public interest.
(2) Every person belonging to the class mentioned in clause (a) or clause (b) of sub-section (1) shall have his name entered in the register without the payment of any entrance fee.
(3) Every person belonging to any of the classes mentioned in clauses (c), (d) and (e) of sub-section (1) shall have his name entered in the register on application being made and granted in the prescribed manner and on payment of prescribed entrance fee, which shall not exceed four hundred rupees in any case.
(4) The Central Government may take such steps as may be necessary for the purpose of having the names of all persons belonging to the classes mentioned in clauses (a) and (b) of sub-section (1) entered in the Register at the commencement of this Act.
(5) Notwithstanding anything contained in this section, the council may confer on any person honorary fellow membership, if the council is of the opinion that such person has made a significant contribution to the profession of company secretaries and thereupon the council shall enter the name of such person in the register but such person shall not have any voting rights in any election or meetings of the Institute and shall not also be required to pay any fee to the Institute.
SECTION 05: ASSOCIATES AND FELLOWS
(1) The members of the Institute shall be divided into two classes designated respectively as associates and fellows.
(2) Any person other than a person to whom the provisions of sub-section (4) apply, shall, on his name being entered in the register, be deemed to have became an associate and as long as his name remains so entered, shall be entitled to use the letters "A.C.S." after his name to indicate that he is an associate.
(3) A person, being an associate who has been in continuous practice in India as a company secretary for at least five years and a person who has been an associate for a continuous period of not less than five years and who possesses such qualifications or practical experience as the council may prescribe with a view to ensuring that he has experience equivalent to the experience normally acquired as a result of continuous practice for a period of five years as a company secretary shall, on payment of the prescribed entrance fee, which shall not exceed four hundred rupees in any case, and no application made and granted in the prescribed manner, be entered in the register as a fellow.
Explanation I: For the purposes of this sub-section, a person shall be deemed to have practiced in India for any period for which he has held a certificate of practice under section 6, notwithstanding that he did not actually practice during that period.
Explanation II : In computing the period during which a person has been an associate of the institute, there shall be included any continuous period during which the person has been an associate of the dissolved company immediately before he become an associate of the institute.
(4) Any person who was a fellow of the dissolved company and who is entitled to have his name entered in the register under clause (a) of sub-section (1) of section 4, shall be entered in the register as a fellow.
(5) Any person whose name is entered in the register as a fellow shall, so long as his name remains so entered, be entitled to use the letters "F.C.S." after his name to indicate that he is a fellow.
SECTION 06: CERTIFICATE OF PRACTICE
(1) No member of the institute shall be entitled to practice, whether in India or elsewhere, unless he has obtained from the council a certificate of practice.
(2) A member who desires to be entitled to practice shall make an application in such form and pay such a annual fee, for his certificate as may be prescribed which shall not exceed two hundred rupees in any case, and such fee shall be payable on or before the lst day of April in each year.
SECTION 07: MEMBERS TO BE KNOWN AS COMPANY SECRETARIES
Every member of the institute in practice shall, and any other member may, use the designation of a company secretary and no member using such designation shall use any other description, whether in addition thereto or in substitution therefor:
PROVIDED that nothing in this section shall be deemed to prohibit any such member from adding any other description or letters to his name, if entitled thereto, to indicate membership of such other institute whether in India or elsewhere as may be recognised in this behalf by the council, or any other qualification that he may possess, or to prohibit a firm, all the partners of which are members of the institute and in practice, from being known by its firm name as company secretaries.
SECTION 08: DISABILITIES
Notwithstanding anything contained in section 4, a person shall not be entitled to have his name entered in, or borne on, the register if he-
(a) has not attained the age of twenty-one years at the time of his application for the entry of his name in the register; or
(b) is of unsound mind and stands so adjudged by a competent court; or
(c) is an undischarged insolvent; or
(d) being a discharged insolvent, has not obtained from the court a certificate stating that his insolvency was caused by misfortune without any misconduct on his part; or
(e) has been convicted by a competent court, whether within or without India, of an offence involving moral turpitude and punishable with imprisonment or of an offence, not of a technical nature, committed by him in his professional capacity unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, removed the disability; or
(f) has been removed from membership of the Institute on being found on inquiry to have been guilty of professional or other misconduct:
PROVIDED that a person who has been removed from membership for a specified period shall not be entitled to have his name entered in the register until the expiry of such period.
CHAPTER III: COUNCIL OF THE INSTITUTE
SECTION 09: CONSTITUTION OF THE COUNCIL OF THE INSTITUTE
(1) There shall be a council of the institute for the management of the affairs of the institute and for discharging the functions assigned to it by or under this Act.
(2) The council shall be composed of-
(a) not more than twelve persons elected by members of the Institute from amongst the fellows chosen in such manner and from such regional constituencies as may be notified in this behalf by the Central Government in the Official Gazette; and
(b) not more than four persons nominated by the Central Government.
SECTION 10: MODE OF ELECTION TO THE COUNCIL
(1) Elections under clause (a) of sub-section (2) of section 9 shall be conducted in the prescribed manner.
(2) Where any dispute arises regarding any such election, the matter shall be referred by the council to a Tribunal appointed by the Central Government in this behalf and the decision of such Tribunal shall be final:
PROVIDED that no such reference shall be made except on an application made to the council by an aggrieved party within thirty days from the date of the declaration of the result of the election.
(3) The expenses of the Tribunal shall be borne by the council.
(4) Notwithstanding anything contained in this section and in Chapter IX, the council of the dissolved company shall, on the commencement of this Act, become the council of the institute and shall function as such-
(i) for a period of two years from such commencement, or
(ii) till the council is constituted in accordance with the provisions of sub-section (2) of section 9,
whichever is earlier.
Explanation : For the purposes of this sub-section, the council shall be deemed to have been constituted in accordance with the provisions of sub-section (2) of section 9 with effect from such date not being later than thirty days from the date on which the results of the first elections, under clause (a) of the said sub-section (2) are announced as the Central Government may notify in the Official Gazette.
SECTION 11: NOMINATION IN DEFAULT OF ELECTION
If the members of the institute fail to elect any member under clause (a) of sub-section (2) of section 9 from any of the regional constituencies that may be notified under that clause, the Central Government may nominate any duly qualified person from such constituency to fill up the vacancy, and any person so nominated shall be deemed to be a duly elected member of the council.
SECTION 12: PRESIDENT AND VICE-PRESIDENT
(1) The council at its first meeting shall elect two of its members to be respectively the President and the Vice-President thereof, and so often as the office of the President or the Vice-President falls vacant, the council shall choose a person to be the President or the Vice-President, as the case may be:
PROVIDED that the President of the council of the dissolved company shall continue to hold such office after the commencement of this Act, until such time as a President is elected under the provisions of this sub-section.
(2) The President shall be the Chief Executive Authority of the council.
(3) The President or the Vice-President shall hold office for a period of one year from the date on which he is chosen but so as not to extend beyond his term of office as a member of the council, and subject to his being a member of the council at the relevant time, he shall be eligible for re-election.
(4) On the expiration of the duration of the council, or of the term of office of the President thereof, the President shall continue to hold office until such time as a new President is elected and takes over charge of his duties.
(5) In the event of the occurrence of any vacancy in the office of the President, the Vice-President shall act as President until the date of which a new President elected in accordance with the provisions of this section to fill such vacancy enters upon his office and when the President is unable to discharge his functions owing to absence, illness or any other cause, the Vice-President shall discharge his functions until the date on which the President resumes his duties.
SECTION 13: RESIGNATION OF MEMBERSHIP AND CASUAL VACANCIES
(1) Any member of the council may at any time resign his membership by writing under his hand addressed to the President, and the seat of such member shall become vacant when such resignation is notified in the Official Gazette.
(2) A member of the council shall be deemed to have vacated his seat if he is declared by the council to have been absent without sufficient excuse from three consecutive meetings of the council or of any of the committees which has been constituted by the council and of which he is a member or if his name is, for any cause, removed from the Register under the provisions of section 20.
(3) A casual vacancy in the office of a member of the council shall be filled by fresh election from the constituency concerned or by nomination by the Central Government, as the case may be, and the person elected or nominated to fill the vacancy shall hold office until the dissolution of the council:
PROVIDED that no election shall be held to fill a casual vacancy occurring within six months prior to the date of the expiration of the term of the council, but such a vacancy may be filled by nomination by the Central Government after consultation with the President of the council.
(4) No act done by the council shall be called in question on the ground merely of the existence of any vacancy in, or defect in the constitution of, the council.
SECTION 14: DURATION AND DISSOLUTION OF THE COUNCIL
(1) The duration of any council constituted under this Act shall be three years from the date of its first meeting.
(2) Notwithstanding the expiration of the duration of a council (hereafter in this sub-section referred to as the former council), the former council shall continue to exercise its functions under this Act until a new council is constituted in accordance with the provisions of this Act and on such constitution the former council shall stand dissolved.
SECTION 15: FUNCTIONS OF THE COUNCIL
(1) The duty of carrying out the provisions of this Act shall be vested in the council.
(2) In particular, and without prejudice to the generality of the foregoing power, the duties of the council shall include-
(a) the prescribing of the standards for, and conduct of examinations for enrolment of candidates in the register and of the fees therefore;
(b) the registration and training of students;
(c) the prescribing of qualification for entry in the register;
(d) the recognition of foreign qualifications and training for purposes of enrolment;
(e) the granting or refusal of certificates of practice under this Act;
(f) the maintenance and publication of a register of persons qualified to practise as company secretaries;
(g) the levy and collection of fees from members, examinees and other persons;
(h) the removal of names from the register and restoration to the register of names which have been removed;
(i) the regulation and maintenance of the status and the standards of professional qualifications of members of the institute;
(j) the carrying out, by granting financial assistance to persons other than members of the council or in any other manner of research in such matters of interest to company secretaries as may be prescribed;
(k) the maintenance in the prescribed manner of libraries and the publication in the prescribed manner of books and periodicals relating to management of companies and such allied subjects as may be prescribed;
(l) the granting of such financial or other assistance to students of the institute as may be prescribed;
(m) the exercise of such disciplinary powers as may be prescribed.
SECTION 16: STAFF, REMUNERATION AND ALLOWANCES
(1) For the efficient performance of its duties and functions, the council shall appoint a secretary who shall be a member of the institute and may-
(a) appoint such other persons on the staff of the institute as it deems necessary;
(b) prescribe the terms and conditions of service and the scales of pay of the secretary and other employees of the institute, including persons who have become employees of the institute under section 33;
(c) fix the allowances of the President, Vice-President and other members of the council and its committees.
(2) The secretary of the institute shall be entitled to participate in the meetings of the council and the committees thereof but shall not be entitled to vote thereat.
SECTION 17: COMMITTEES OF THE COUNCIL
(1) The council shall constitute from amongst its members the following standing committees, namely,-
(a) an executive committee;
(b) a disciplinary committee; and
(c) an examination committee.
(2) The council may also constitute a training and educational facilities committee, professional research, and publications committee and such other committees from amongst its members as it deems necessary for the purpose of carrying out the provisions of this Act.
(3) The executive committee shall consist of the President, and the Vice-President, ex officio, and three other members of the council elected by the council.
(4) The disciplinary committee shall consist of the President or the Vice-President, ex officio, one member to be nominated by the Central Government from amongst the members nominated to the council by that government and one member to be elected by the council.
(5) The examination committee shall consist of the President or the Vice-President, ex officio, as the council may decide, and two other members of the council elected by the council.
(6) Notwithstanding anything contained in this section, any committee formed under sub-section (2) may, with the sanction of the council, co-opt such other members of the institute not exceeding two-thirds of the total membership of the committee as the committee thinks fit, and any member so co-opted shall be entitled to exercise all the rights of a member of the committee.
(7) Every committee constituted under this section shall elect its own chairman:
PROVIDED that-
(i) where the President is a member of such committee, he shall be the chairman of such committee, and in his absence, the Vice-President, if he is a member of such committee, shall be its chairman; and
(ii) where the President is not a member of such committee, but the Vice-President is a member, he shall be its chairman.
(8) The Standing Committees and other committees formed under this section shall exercise such functions and be subject to such conditions in the exercise thereof as may be prescribed.
SECTION 18: FINANCE OF THE COUNCIL
(1) There shall be established a fund under the management and control of the council into which shall be paid all moneys (including donations and grants) received by the council and out of which shall be met all expenses including any donations made and liabilities properly incurred by the council.
(2) The council may invest any money for the time being standing to the credit of the fund in any government security or in any other security approved by the Central Government.
(3) The council shall keep proper accounts of the funds distinguishing capital from revenue.
(4) The annual accounts of the council shall be subject to audit by a chartered accountant in practice within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), to be appointed annually by the council:
PROVIDED that no member of the council who is a chartered accountant or a person who is in partnership with such member shall be eligible for appointment as an auditor under this sub-section.
(5) As soon as may be practicable at the end of each year, but not later than the 30th day of September of the year next following, the council shall cause to be published in the Gazette of India a copy of the audited accounts and the report of the council for that year and copies of the said accounts and report shall be forwarded to the Central Government and to all the members of the institute.
(6) Subject to such directions as the Central Government may, by order in writing, make in this behalf, the council may borrow-
(a) any money required for meeting its liabilities on capital account on the security of the fund or on the security of any other assets for the time being belonging to it; or
(b) for the purpose of meeting current liabilities pending the receipt of income by way of temporary loan or over-draft.
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