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Applicability of Secretarial Standards (SS1 & SS2 - w.e.f. 1st July 2015)

ICSI NO. 1(SS) of 2015 published in the Gazette of India, Extraordinary Part III – Section 4 dated 23rd April, 2015 (to view/download a copy of the gazette notification - click here)

In exercise of the powers conferred by sub-section (10) of section 118 and explanation under sub-section (1) of section 205 of the Companies Act, 2013 (18 of 2013), the Central Government has vide letter no.1/3/2014/CL/I dated April 10, 2015 approved the following Secretarial Standards (SS), specified by the Institute of Company Secretaries of India constituted under Section 3 of Companies Secretaries Act, 1980 namely, :-

(i) SS-1 : Meetings of the Board of Directors and
(ii) SS-2 : General Meetings

These Secretarial Standards shall come into force on 1st day of July, 2015.


MCA Notification Exempting Section 8 Companies

The Ministry of Corporate Affairs (MCA), in exercise of its powers conferred by clauses (a) and (b) of Section 462 (1) and (2) of the Companies Act, 2013 (the Act) issued Notifications No. G.S.R. 466(E) dated 5th June, 2015, has directed that certain provisions of the Act shall not apply or shall apply with such exceptions, modifications and adaptations as specified in the MCA Notification (s) to Section 8 (Non–Profit) Companies.

Section 118 of the Companies Act 2013 is included in the exemption. The section shall not apply as a whole except that minutes may be recorded within thirty days of the conclusion of every meeting in case of companies where the articles of association provide for confirmation of minutes by circulation.

Hence, sub-section (10) of section 118, which prescribes applicability of secretarial standards, will not be applicable on Section 8 (Non–Profit) Companies.


Scope of the Secretarial Standards

The Scope of the Secretarial Standards as laid down in SS-1 and SS-2 is as under: 

“This Standard is in conformity with the provisions of the Act. However, if due to subsequent changes in the Act, a particular Standard or any part thereof becomes inconsistent with the Act, the provisions of the Act shall prevail.” 

Accordingly, if due to MCA Notification (s) referred to herein above, a particular standard or any part thereof becomes inconsistent with any of the provisions of the Act, such corresponding provisions of the Act read with the MCA Notification (s) shall prevail. 


Clarification issued by ICSI on Applicability of Secretarial Standards

Considering the date of effectiveness of Secretarial Standards, the Institute clarifies the following:

1. These Secretarial Standards (SS-1 and SS-2) shall apply to Board Meetings and General Meetings, in respect of which Notices are issued on or after 1st July, 2015.

2. The Secretarial Audit Report for the Financial Year 2014-15 need not report specific non-compliances/observations/audit qualification, reservation or adverse remarks in respect of compliance with SS-1 and SS-2 as these will become effective from 01st July, 2015.

3. Further, other Secretarial Standards issued by ICSI in line with the provisions of the Companies Act, 1956 are under revision to align with the provisions of the Companies Act, 2013. Accordingly, such other Secretarial Standards are not applicable presently.

The Secretarial Audit Report issued pursuant to the provisions of Section 204 (1) of the Act read with Rule 9(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, shall be in Form No. MR-3 (Secretarial Audit Report) and shall inter-alia mention about the examination conducted by the Secretarial Auditor w.r.t. the compliance by a Company under the applicable clauses of the Secretarial Standards.


Useful Links

FAQ on Secretarial Standards - link
MCA Approval Letter - link
Secretarial Standard on Meetings of the Board of Directors (SS-1) - link
Secretarial Standard on General Meetings (SS-2) - link
Clarification on Applicability of Secretarial Standards by ICSI - link
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