The Ministry of Corporate Affairs vide Notification dated 3rd January 2020 has issued the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020 further to amend the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. This amended Rules shall be applicable in respect of financial years commencing on or after 1st April 2020.
The Amendment substituted rule 8A to provide that every private company which has a paid-up share capital of 10 crore, or more shall have a whole-time company secretary.
Apart from Rule 8A, changes have been made to Rule 9(1). Now, under Rule 9(1) there shall be 3 classes of companies shall require to annex with its Board’s report a secretarial audit report given by a company secretary-
- Every public company having a paid-up share capital of 50 crore Rupees or more; or
- Every public company having a turnover of 250 crore Rupees or more, or
- Every company having outstanding loans or borrowings from banks or public financial institutions of 100 Crore Rupees or more. It is also clarified that the paid-up share capital, turnover, or outstanding loans or borrowings, existing on the last date of the latest audited financial statement shall be taken into account.
Prior to the amendment, this 3rd category of companies was not there in the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.