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The Advantages of Appointing a Company Secretary

Recent developments as per the 383A of Companies Act, 2013 demand that every company having a paid-up share capital of Rs. 5 crores shall have a whole-time secretary. Owing to the implementation of new sections and rules by the Companies Act, 2013, companies now have to appoint a whole-time secretary if they fall under the mentioned category.

However, before we get to know the advantages that come with a company secretary, let us shed some light on the roles and responsibilities of a Company Secretary. In other words, who is a Company Secretary?

Background on the role of a Company Secretary

A Company Secretary is a person who deals with the financial and legal issues and is a member of the board of the company. The designation of a company secretary as per the Companies Act, 2013 is “Key Managerial Personnel.” In short, a company secretary is a secretarial services manager responsible to ensure that all processes, activities, and fucntions of a company comply with the law.

It must be noted by companies that if they contravene the provision made under the Companies Act 2013, the company shall be penalised with a fine, which would not be less than One Lakh rupees and may extend to Five Lakh rupees.

Why opt for a company secretary?

Apart from avoiding the fines and penalisations that follow when you do not run adequate company secretarial services, the benefits of having a company secretary are as follows:

1. They are helpful when it comes to developing strong commercial benefits:

Strong commercial benefits are by-products of having a good company secretary. Higher valuation is a given in the presence of a good company secretary.

The logical question that follows is, how will appointing a company secretary increase company valuation? A good company secretary will ensure that there are no loose ends in a deal and that the investors and purchasers are legitimate and safe to do business with thereby averting crisis that can affect the company revenue.

2. Happier stakeholders:

If the company manages to avert crisis and height those profit chart graphs, it not only pleases investors but the stakeholders also. Every stakeholder has a right to know about the company’s administration and this privilege comes in compliance with the Shareholder Agreement. Giving stakeholders the right to know is thereby an obligation of the board. Secretarial typing services come in handy when drafting documents that enable stakeholders to be at par with the company’s administration.

3. Corporate governance:

Appropriate company governance is the key to ensuring that the company administers the way in which it befits the interests of the shareholders. Professionally developed companies ensure that their director’s decisions are not only run but that they are run regularly enough to be called a practice. The company secretary being a part of the board contributes to the director’s decisions.

The role of a professional offering secretarial services varies from company to company and their responsibilities can be far more than what has been mentioned in this article. Regardless of their eventual role, it has to be acknowledged that a company secretary is undeniably the most important part of a successful company.

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