The Institute of Company Secretaries of India (ICSI) has appealed to the Union corporate affairs ministry (MCA) to widen the criteria for the appointment of company secretaries.

The ministry, through a notification last week, has introduced amendments to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any listed or unlisted public company or a private company with a paid-up capital of more than Rs 10 crore would now need to appoint a wholetime company secretary. The earlier limit was Rs 5 crore.

The institute welcomed the change but wants the appointment criteria to be widened to include turnover as well as borrowings.

“For 11 years, there was no change. So, it was required. But if the idea is to take inactive companies out of the net, we have requested the MCA to include turnover and borrowing criteria as options along with paid-up capital,” Ranjeet Pandey, president of the ICSI, said on the sidelines of the 20th National Conference of Student Company Secretaries.

“One serious non-compliance could be a disaster. We don’t want companies to get exposed without the services of company secretaries,” said Pandey.

No shortage

According to government estimates, about 35,000 companies would require wholetime company secretaries based on the paid-up capital criteria. Although the institute has a roll of around 60,700 company secretaries, there is a concern that many are moving to different professions after the scope of work has widened to include insolvency and arbitration.

However, Pandey said there were enough company secretaries to meet the demand. “The number at present is such that there would be breakeven,” he said.

Secretarial audit

The MCA has also expanded the scope of the secretarial audit of companies. Earlier, it was applicable for public companies with a paid-up capital of Rs 50 crore and above or a turnover of Rs 250 crore or more. Now, the class of companies also includes any firm having loans or borrowings from banks of Rs 100 crore or more.