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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Empowerment of the Company Secretary Profession

Zenith Polymers Ltd's Company Secretary, Ms. Kavya Rao, finds that the company has delayed filing a statutory return under the Companies Act, 2013 and other applicable laws. Under Section 205, what is her function in this situation?

The Company Secretary should report the compliance position to the Board. Section 205(1)(a) lists reporting to the Board about compliance with the Companies Act, its rules and other applicable laws as a core function, so the lapse must be brought to the Board's attention.

  1. AReport to the Board about the compliance position with the Act, the rules and other applicable lawsCorrect
  2. BPay the penalty personally on behalf of the company
  3. CRemove the Managing Director from office for the lapse
  4. DWait for the Registrar to point out the default before informing anyone

Explanation

Section 205(1)(a) requires the company secretary to report to the Board about compliance with the Act, the rules made under it and other laws applicable to the company. The company secretary has no power to remove directors or to bear penalties personally. Waiting for the Registrar defeats the reporting function.

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