The Companies Act 2013 is the governing legislation for companies in India. It outlines various provisions and guidelines for the functioning and management of companies, including the appointment and removal of key officers such as the company secretary. Under the Companies Act 2013 in India, the position of a company secretary holds great importance in ensuring compliance and maintaining corporate governance within a company. However, there may be situations where it becomes necessary to remove a company secretary from their role. In this article, we will discuss the circumstances in which a company secretary may be removed after company registration in India and also discuss the removal of a company secretary while adhering to the provisions of the Companies Act 2013.
A company secretary plays a vital role in ensuring compliance with legal and regulatory requirements, maintaining transparent corporate governance, and facilitating effective communication within the company and with external stakeholders. However, certain situations may arise where the removal of a company secretary becomes necessary.
Under Section 203 of the Companies Act 2013, a company secretary can be removed by the company’s board of directors or shareholders under certain circumstances. These grounds for removal of a Company Secretary include:
The removal of a company secretary, whether initiated by the board or shareholders, must follow the procedural requirements prescribed by the Companies Act 2013. These include:
Following is the step-by-step process for the removal of a Company Secretary:
The removal process begins with convening a board meeting to discuss the removal of the company secretary. The board must pass a special resolution for the removal, as stipulated in Section 203 of the Companies Act 2013. The resolution should clearly mention the reasons for removal and be approved by a majority of the directors.
After passing the special resolution, the company is required to file Form DIR-12 with the Registrar of Companies (RoC) within 30 days from the date of passing the resolution. Form DIR-12 is used for the appointment or cessation of directors, including the removal of a company secretary. The following vital documents must be attached to the form:
a. Certified copy of the board resolution for the removal of the company secretary.
b. Notice of the board meeting where the resolution was passed.
c. Resignation letter from the company secretary, if applicable.
d. Any other relevant documents as required by the RoC.
The company must formally communicate the decision to remove the company secretary by issuing a letter or notice. The letter should mention the effective date of removal and inform the company secretary about their rights to be heard at a general meeting. It is essential to maintain transparency and adhere to the principles of natural justice throughout the process.
Once the company secretary is removed, the company is required to file Form MGT-14 with the RoC within 30 days of passing the special resolution. Form MGT-14 is used to notify the RoC about the resolution passed at the general meeting. The following vital documents should be attached to the form:
a. Certified copy of the special resolution passed for the removal of the company secretary.
b. Notice of the general meeting where the resolution was passed.
c. Any other relevant documents as required by the RoC.
The company must update its statutory registers to reflect the change in the position of the company secretary. The registers that need to be updated include the Register of Directors & Key Managerial Personnel (KMP), the Register of KMPs, and any other relevant registers maintained by the company.
The company should ensure compliance with any additional requirements specified in its articles of association or any agreement entered into with the company secretary. For example, if there are notice periods or specific provisions regarding termination in the employment contract, those should be followed accordingly.
In summary, the Companies Act 2013 [1] provides guidelines and grounds for removing a company secretary, whether initiated by the board of directors or shareholders. The removal process must adhere to the procedural requirements laid out in the provisions. Removing a company secretary after company registration in India requires adherence to the provisions outlined in the Companies Act 2013. By following the step-by-step guide provided above, companies can ensure a smooth and legally compliant process for removing a company secretary. It is crucial to consult with legal professionals or company secretaries to ensure all legal obligations are met and to mitigate any potential legal risks during the removal process. While the appointment of a company secretary is a crucial step for ensuring compliance and efficient corporate governance, circumstances may arise where their removal becomes necessary.
