Functions of a Company Secretary: Section 205

The functions of a company secretary are set out in section 205 of the Companies Act, 2013, and there are three of them. Report to the Board about compliance with the Act, the rules made under it and other laws applicable to the company. Ensure that the company complies with the applicable secretarial standards. Discharge such other duties as may be prescribed.

What are the three functions of a company secretary?

The functions of a company secretary in section 205(1) are worth reading for what each one is addressed to, because they are three different kinds of obligation.

Clause (a) is a reporting duty and its scope is wider than the Companies Act. It reaches "other laws applicable to the company", so a secretary reporting only on company-law compliance has not discharged it. Clause (b) is a compliance duty rather than a reporting one: the secretary is not asked to report on the standards but to ensure the company follows them.

What counts as a secretarial standard?

The Explanation to section 205 answers this in one sentence, and both of its limbs are load-bearing. The expression "secretarial standards" means secretarial standards issued by the Institute of Company Secretaries of India, constituted under section 3 of the Company Secretaries Act, 1980, and approved by the Central Government. A standard the Institute has issued but the Central Government has not approved is outside the definition.

The Act makes secretarial standards binding elsewhere too, not only through this section. Section 118(10) requires every company to observe secretarial standards with respect to general and Board meetings, and minutes of a general meeting covers the record those standards govern. The report on an annual general meeting under section 121 carries a confirmation of compliance with the Act, the rules and the secretarial standards with respect to calling, convening and conducting the meeting, and the report on an AGM under section 121 covers that filing.

How does the company secretary role fit into the statutory scheme?

Section 205 describes the functions. Two neighbouring provisions decide who holds the office and how the work is checked.

• Appointment. The company secretary is named in the definition of key managerial personnel in section 2(51), and section 203(1) lists a company secretary among the whole-time key managerial personnel that a prescribed class of company must have. Key managerial personnel under section 203 covers that obligation and the six-month clock on filling a vacancy.
• Audit. Section 204 requires secretarial audit for bigger companies, which is a report by a practising company secretary rather than by the company's own secretary. The secretarial audit report covers Form MR-3 and who has to obtain one.

Section 205(2) then makes clear that neither section transfers responsibility. The provisions contained in section 204 and section 205 shall not affect the duties and functions of the Board of Directors, the chairperson of the company, the managing director or the whole-time director under the Act or any other law for the time being in force. A compliance report from the secretary does not discharge the Board, and a clean secretarial audit does not either. The Board's own duties continue to run, and duties of a director under section 166 covers them.

Where the company secretary appears in the Act's record-keeping

Beyond section 205, the practical shape of the role for anyone reading a company's filings is record-keeping: the Act requires a series of registers, and the rules made under it settle who keeps each one. Two examples of the registers themselves:

• The register of investments a company does not hold in its own name, which section 187(3) requires and opens to inspection by any member or debenture-holder without charge during business hours. Investments held in a company's own name covers that register, and the rule that prescribes its particulars and puts it in the company secretary's custody, with the provenance caveat that rule text carries.
• The register of contracts or arrangements in which directors are interested is maintained under section 189, and the register of contracts under section 189 covers what it holds and who may inspect it.

Where the functions of a company secretary show up in a filing

Section 205 produces no filing of its own. Its clause (a) report is made to the Board, not to the Registrar or an exchange. What reaches the public record is the audit that checks the same territory from outside: the Form MR-3 secretarial audit report required by section 204 for listed companies and other prescribed classes, and for listed entities the separate secretarial compliance report, which the secretarial compliance report covers. Read together, they are the visible half of a compliance function whose primary output is internal.

Where this sits in the disclosure picture

• Key managerial personnel under section 203 covers the appointment obligation that puts a company secretary in office.
• The secretarial audit report covers the section 204 audit that section 205(2) is read with.
• The secretarial compliance report covers the listed-entity report on securities-law compliance.
• Minutes of a general meeting covers the record that section 118(10) makes subject to secretarial standards.
• Duties of a director under section 166 covers the Board duties section 205(2) preserves.
• Meetings of the Board under section 173 covers the meetings the compliance report is made to.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.