Stronger Enforcement Sought for Mandatory Whole-time Company Secretary Posts Under Section 203

The Institute of Company Secretaries of India (ICSI) has called upon the Ministry of Corporate Affairs (MCA) to strictly enforce the statutory requirement for appointment of Whole-time Company Secretaries in eligible companies. This obligation arises under Section 203 of the Companies Act 2013, read together with Rule 8 and Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Under this framework, every listed company, as well as every public company meeting the specified paid-up share capital threshold, must appoint a Whole-time Company Secretary as a key managerial personnel. ICSI has highlighted instances of non-compliance, especially among Government Companies and Public Sector Undertakings (PSUs), and has urged the MCA to intervene to secure full adherence to these provisions.

Statutory Framework for Whole-time Company Secretary Appointment

Section 203 of the Companies Act 2013 mandates that certain classes of companies appoint key managerial personnel, which explicitly includes a Whole-time Company Secretary.

Read with:

  • Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
  • Rule 8A of the same Rules

the law provides that:

  • Every listed company must appoint a Whole-time Company Secretary; and
  • Every other public company having the prescribed paid-up share capital (for instance, rupees ten crore or more, as referred in the representation) must appoint a Whole-time Company Secretary as a key managerial personnel.

The legislative intent is clear: companies falling within these parameters cannot function without a full-time, board-level governance professional overseeing compliance, secretarial standards, and regulatory interface.

Role of Whole-time Company Secretary in Governance

The appointment of a Whole-time Company Secretary is not a mere procedural formality. The position is central to:

  • Ensuring compliance with the Companies Act 2013 and allied corporate laws
  • Supporting the Board in discharging its fiduciary and statutory responsibilities
  • Strengthening transparency in corporate decision-making
  • Maintaining accurate records, minutes, and statutory registers
  • Facilitating timely filings and disclosures with regulatory authorities

As a key managerial personnel, the Whole-time Company Secretary is expected to be integral to the internal governance framework and not merely an external or part-time advisor.

ICSI’s Concerns on Widespread Non-Compliance

Reported Non-Compliance in Jammu & Kashmir PSUs

ICSI, in its representation to the MCA, has drawn attention to several companies, including notable Government Companies and PSUs, that appear to have breached the statutory mandate relating to appointment of Whole-time Company Secretaries.

The Institute has specifically mentioned cases brought to its notice from the Union Territory of Jammu & Kashmir. Among the entities referenced in the communication are:

  • Jammu and Kashmir Industries Limited
  • Jammu and Kashmir Cements Limited
  • Jammu & Kashmir State Cable Car Corporation Limited
  • Jammu and Kashmir State Womens’ Development Corporation Limited

These undertakings, based on their paid-up capital position as indicated, appear to fall within the category of companies obligated to appoint a Whole-time Company Secretary under Section 203 read with Rule 8 and Rule 8A.

Use of Contractual Company Secretaries

A key issue flagged by ICSI is the tendency of certain PSUs and Government Companies to appoint Company Secretaries only on a contractual basis, instead of as Whole-time key managerial personnel.