Statutory Liabilities

Statutory Liabilities
The Companies Act has recognised the secretary as a principal officer of the company, and as such various liabilities have been imposed upon him. As per Section 5 of the Act, a secretary has been included in the list of 1/ officers in default” and is made liable to heavy penalties for any default or non-compliance of the provisions of the Act. The company secretary is responsible for conducting the affairs of the company in accordance with the provisions of the Companies Act. He is also responsible to comply with the requirements of other laws of the country. Thus, the company secretary may be held liable for various acts of omission or commission in the management of the company.
The company secretary may be held liable for the following matters under Companies Act:
(i) Default in Filing Returns as to Allotment. If a default is made in filing returns as to allotment of shares within the prescribed time, he shall be punishable with fine which may extend to five thousand rupees for every day during which the default continues
(ii) Default in the Preparation of Share Certificates, Etc. Share certificates and debenture certificates should be ready for delivery within three months after allotment and within two months after the application for registration of transfer; otherwise, a fine up to Rs. 5,000 for every day of default may be imposed
(iii) Default Regarding Register of Members. Failure to maintain register and index of members and debentureholders as required under the Act shall make him liable for a fine up to Rs 500 (iv) Default in Making Entries on the Issue of Share Warrants. When share warrants are issued in respect of fully paid shares, necessary entries should be made in the register of members. If a default is made, he shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues
(v) Default in Registration of Charges on Properties Acquired Subject to Charge. When a company acquires any property which is subject to a charge of any kind, the necessary particulars of the charge should be filed with the Registrar, failing which a fine up to Rs. 5000 may be imposed
(vi) Default in the Filing of Particulars Regarding Charges. If a default is made in filing with the Registrar the particulars of any charge created by the company, he shall be punishable with fine which may extend to Rs. 5000 for every day during which the default continues
(vii) Default Regarding the Publication of Name of Company. If a default is made in getting the name and address of the registered office of the company painted or affixed outside every office or place of business, a fine up to Rs. 500 for every day of default can be imposed. If a default is made in engraving the name of the company in legible characters on its seal and on all its business letters, bill heads, etc., a fine up to Rs. 5000 may be
(viii) Default in Filing of Annual Returns. If a default is made in filing the annual returns as per the provisions of Sections. 150, 160 and 161, he shall be liable for a fine which may extend to Rs. 500 for every day of default
(ix) Default in the Holding of the Statutory Meeting. If a default is made in holding the statutory meeting, he shall be liable to a fine which may extend to Rs.
(x) Default in Holding Annual General Meeting. Default in holding the annual general meeting in accordance with the provisions of Sections. 166 and 167, shall make him liable for a fine which may extend to Rs. 50,000 and in the case of continuing default, with a further fine up to Rs. 2500 for every day during which the default
(xi) Default in Circulation of Members’ Resolutions. If a default is made in circulating members’ resolution of which they have given notice to the company, he shall be
puishable with fine which may extend to Rs. 50,000
(xii)Default in Registering Certain Resolutions and Agreements. This default shall be punishable with fine which may extend to Rs. 200 for every day during which the default (xiii) Default in Recording the Minutes of the Meetings. If a default is made in recording the minutes of all proceedings of every general meeting and meetings of the Board, a fine up to Rs. 500 may be imposed
(xiv)Default in Maintaining Minutes Book or Allowing Inspection or Furnishing Copies of Minutes to Members. If a default is made in furnishing a copy of the minutes within seven days after the date of request by any member or if inspection is not allowed, a fine up to Rs. 5,000 may be imposed
(xv)Failure to Give Notice of Board’s Meeting. The notice must be given in writing to every director for the time being in India and at his usual address in India to every other director, otherwise a fine up to Rs. 1000 may be imposed
(xvi)Failure to Maintain the Register of Directors. If a default is made in maintaining the register of directors, he shall be liable to be punished with fine, which may extend to Rs. 500 for every day during which the default continues
(xvii)Failure to Maintain the Register of Directors’ Shareholdings. For this default a fine up to Rs. 50,000 may be imposed
(xviii)Failure to Maintain Register of Inter-corporate Loans and Investments. For this default a fine up to Rs. 5,000 plus a further fine up to Rs. 500 per day of default may be imposed In addition to the above-mentioned liabilities under the Companies Act, a company secretary is responsible for deducting income tax from the salaries of the staff and from dividends or interest and depositing the same in Government treasury under Income-tax Act.
Under the Indian Stamp Act, a secretary is responsible to ensure that documents like share certificates, share warrants, debenture certificates, transfer forms, etc. are properly stamped as per the provisions of Indian Stamp Act.
In case the company is a manufacturing concern the secretary shall also be responsible for complying with the requirements of the various labour laws such as Employees’ State Insurance Act, Factories Act, Minimum Wages Act, Payment of Wages Act, Industrial Disputes Act, etc. The company secretary is also responsible to fulfil the duties cast upon him under the Foreign Exchange Management Act (F.E.M.A.) and the Monopolies and Restrictive Trade Practices (M.R.T.P.) Act.