Considering that there are only around 5,800 Practising Company Secretaries or PCS in the country, each one will get to sign a reasonable number of annual returns, even if all such companies were to be distributed evenly. So all the practising professionals surely have a reason to cheer!

There is enough buzz in the corporate world regarding the role of Practising Company Secretaries (PCS) under the Companies Act, 2013 (the Act, 2013). Professionals were worried inasmuch as the scope and position of a Company Secretary in employment seemed to have increased, the role of PCS was a matter of concern when the corresponding section of 383A under the Companies Act, 1956 (the Act, 1956) was missing in the Act 2013. However, it seems that Act, 2013 has widened the scope of services that a PCS can offer. One of such area is annual return to be filed by a company under Section 92 of the Act, 2013.

Based on the provisions of Section 92, 203 and 204 of the Act, 2013 read with relevant draft rules, relevant compliance requirements with respect to PCS can be enumerated as under:

Further, in case of a PCS being a co-signatory to the annual return, the PCS will only be verifying the information stated in the annual return. However, where the annual return requires certification of PCS, the PCS shall not only verify the contents of annual return but also certify compliance with provisions of the Act (as specified in Form 7.8).

It is important to note that once the CS is appointed as a full time employee or a part-time employee immediately become a key managerial personnel (KMP) as per the definition of a KMP. Therefore, all the obligations of a KMP get attracted.

As per the information gathered from professional colleagues at present there are about nine lakh active companies. Out of these, about seven lakh companies have a paid up capital of up to Rs50 lakh, which comprises of about only 35,000 public companies and the rest are private companies (i.e. a ‘small company’ as defined u/s 2(85) of the Act, 2013)

So, if small companies are excluded from the abovementioned statistics, we will still have a reasonable figure of companies which will require its annual return to be signed by PCS. The reason behind this is that companies with paid up capital of below Rs5 crore were neither required to appoint a Company Secretary under the Act, 1956 nor is it mandatory to appoint under the Act, 2013. Therefore, we presume that these companies will not appoint a Company Secretary in employment. Further considering that there are only around 5,800 PCS in the country, each PCS will get to sign a reasonable number of annual returns, even if all such companies were to be distributed evenly. So all the practising professionals surely have a reason to cheer!

The content of annual return is very exhaustive as opposed to Schedule V under Act, 1956. Further, the certification is not limited to contents of Annual Return but also covers compliance with all the provisions of the Act. The format of certificate to be given under the Act (Form 7.8) is very similar to a compliance certificate under the Act, 1956. 1956. Apart from this, other particulars such as remunerations, details of KMP, number of board and committee meetings held etc. also has to be certified. Therefore, this certification in itself is wholesome.

However, it is to be kept in mind that with more responsibility comes more accountability. Keeping in mind that the certification requirements are by and large very exhaustive and complex, practising company secretaries have to exercise due caution.

(CS Vinita Nair and CS Aditi Jhunjhunwala are senior associates at Vinod Kothari & Co, and look after corporate law division)