Checklist For Resignation of Company Secretary

Apart from the financial reward, a career as a  Company Secretary also brings a high level of job satisfaction. Whether the company is in the public or private sector or an NGO, the  Company Secretary is an essential member of the management team. The Company Secretary (CS) is a key manager of the company. He is charged with the compliance and legal aspects of the company. The primary role of CS is to manage the company’s accounting, control the company’s tax returns, advise the board of directors regarding the company’s legal and financial risks, and ensure compliance with legal regulations. This article briefly describes the Resignation of Company Secretary, Forms to be filed by Company Secretary upon his Resignation.

Who is the Company Secretary?

The Company Secretary works at the highest level of the company, at the managerial level. This person is responsible for ensuring the smooth running of the company and compliance with all legal requirements. The Company Secretary is a member of the Institute of Company Secretaries of India (ICSI) or has the necessary qualifications.

Company secretaries provide critical advice to the board in these critical areas, drawing on their extensive knowledge of finance, corporate law, governance, and company secretarial practice. They provide assistance to the chairman, CEO, and non-executive directors.

A Company Secretary works in a wide range of organizations, including commercial businesses, government agencies (such as local government and the NHS), and not-for-profit organizations (e.g., professional organizations and charities). Some work as sole practitioners, in small partnerships, or as employees of professional service organizations that provide business secretarial services to a variety of clients for a fee.

Functions of a Company Secretary

The following are the functions of the Company Secretary in a company:

• Report to the Board of Directors on the company’s statement of compliance.
• Ensure that the company adheres to all secretarial standards.
• Perform all other duties as may be determined by the company’s board of directors.
• Convenes and directs meetings of the board of directors and its shareholders.
• To represent the company before all regulatory bodies, tribunals, etc. on behalf of the company.
• Assist and advise the board of directors in relation to proper corporate governance practices.
• He advises the board of directors on the conduct of the company’s affairs.

Formalities to be completed before resignation by the Company Secretary

If a Company Secretary decides to resign from his job, he also has to complete certain formalities to ensure a smooth and orderly exit.

• Resignation letter: The first step in the resignation process is for the Company Secretary to submit a letter of resignation to their immediate supervisor or manager. The resignation letter should include the reason for resignation and the intended date of last work. The letter of resignation should also be addressed to the board of directors or the executive of the company. The Company Secretary should ensure that the resignation letter is duly signed and dated.

• Resolution of the Board of Directors: After submitting the resignation letter, the board of directors should pass a resolution accepting the resignation. The resolution should be recorded in the minutes of the board meeting and should include the effective date of the resignation.

• Handover report: As Company Secretary, you should prepare a handover report detailing the current status of all ongoing projects, pending tasks, and other responsibilities that need to be handed over to the incoming Company Secretary. The transfer protocol must be duly signed and dated.

• Clearance form: Before leaving the organization, the Company Secretary should complete a permission form. A commission is a document that lists all company assets that the Company Secretary was in charge of, such as laptops, mobile phones, identity cards, and other company assets. The settlement form is also used to ensure that the Company Secretary settles any outstanding debts or liabilities with the organization.

• Complete and final settlement form: After completing the settlement form and returning all company assets, the Company Secretary should complete a full and final settlement form. This form is used to calculate the final payment to which the Company Secretary is entitled, including unpaid wages, bonuses, and other benefits.

Forms to be filled by the Company Secretary upon his Resignation 

As per the Companies Act, 2013, the Company Secretary (CS) plays a crucial role in the functioning of a company. The CS is responsible for ensuring the company’s compliance with statutory and regulatory requirements, and is a key link between the company and its stakeholders. However, there may be instances where a CS may choose to resign from their role in the company. In such cases, there are certain forms that need to be filled by the CS as per the Companies Act, 2013. 

The following are the Forms to be filled by the Company Secretary upon his resignation:

• Form DIR-12: The first form that needs to be filled by the CS upon their resignation is Form DIR-12. This form needs to be filed with the Registrar of Companies (RoC) within 30 days of the resignation. Form DIR-12 contains details such as the name of the CS, their resignation date, and the reason for resignation. The form also needs to be signed by the CS and a director of the company.

• Form MGT-14: The second form that needs to be filled is Form MGT-14. This form needs to be filed with the RoC within 30 days of the resignation. Form MGT-14 contains details such as the date of the board meeting where the resignation was accepted, the agenda of the meeting, and the details of the resolution passed. The form also needs to be signed by a director of the company.

• Form AOC-4: The third form that needs to be filled is Form AOC-4. This form needs to be filed with the RoC within 30 days of the resignation. Form AOC-4 contains details such as the financial statements of the company, and the CS is required to provide a certificate stating that they have taken all necessary steps to ensure compliance with the provisions of the Companies Act, 2013. The form needs to be signed by the CS, a director of the company, and the auditor of the company.

• Form ADT-1: The fourth form that needs to be filled is Form ADT-1. This form needs to be filed with the RoC within 15 days of the appointment of a new auditor, after the resignation of the CS. Form ADT-1 contains details such as the name and address of the new auditor, and the date of their appointment. The form needs to be signed by a director of the company.

• Intimation to the Stock Update: The intimation to the Stock Exchange should be done upon the resignation of Company Secretary of the Company.

• Update Resignation of CS on NSDL: After completion of all the above parameters the Resignation of CS must be uploaded on the NSDL Website, as it constitutes an important parameter in Resignation of CS.

Conclusion

The vacant position of secretary should be filled by the company within six months at a meeting of the board of directors. The materials presented here are for informational purposes only. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.