A private company and other company not already covered by Rule 8 must appoint a whole-time Company Secretary when its paid-up share capital reaches ₹10 crore or more. The appointee must be an eligible Company Secretary, and the board must approve the terms and remuneration by resolution. The company should complete the current DIR-12 filing, update its KMP register and records, and fill any later vacancy within six months.
The trigger for appointing a whole-time Company Secretary is often misunderstood. For a private company under Rule 8A, the relevant statutory measure is paid-up share capital—not turnover, revenue, authorised capital or company valuation.
The compliance review should begin before the capital increase becomes effective, because the company needs time to identify an eligible professional, agree employment terms, convene the board and complete the MCA record.
Who is a Company Secretary under the Companies Act?
Section 2(24) of the Companies Act defines "company secretary" by reference to the Company Secretaries Act, 1980 and requires the person to be appointed by the company to perform the statutory functions. Section 2(51) includes the Company Secretary within key managerial personnel.
A whole-time Company Secretary is an officer of the company with responsibility for board-process support, statutory compliance, governance records and regulatory coordination. The role is different from engaging a practising Company Secretary for certification or advisory assignments.
A statutory whole-time Company Secretary is employed by the company. A Company Secretary in practice may provide external certification or advisory services but does not automatically satisfy the whole-time appointment requirement.
Which companies must appoint a Company Secretary?
Rule 8 requires every listed company and every other public company with paid-up share capital of ₹10 crore or more to appoint the prescribed whole-time key managerial personnel, including a Company Secretary.
Rule 8A separately requires every company not covered by Rule 8 that has paid-up share capital of ₹10 crore or more to appoint a whole-time Company Secretary. This is the rule that commonly applies to private companies.
| Company category | Appointment position | Relevant test |
|---|---|---|
| Listed company | Whole-time KMP framework applies | Covered by Rule 8, subject to applicable law and listing requirements. |
| Other public company | Whole-time KMP required when threshold is met | Paid-up share capital of ₹10 crore or more under Rule 8. |
| Private company or other company outside Rule 8 | Whole-time Company Secretary required when threshold is met | Paid-up share capital of ₹10 crore or more under Rule 8A. |
| Company below the applicable threshold | May appoint voluntarily | Articles, investors, lenders or governance needs may still justify appointment. |
The TargoLegal CS Appointment Test
Eligibility requirements
The proposed appointee must be a Company Secretary as defined under the Company Secretaries Act, 1980. The company should verify current ICSI membership, employment eligibility and the individual's ability to accept a whole-time KMP office.
Confirm that the candidate's membership status, employment position and other offices are compatible with the proposed whole-time appointment.
Functions of the Company Secretary
Section 205 identifies core functions, including reporting to the board about compliance with the Act, rules and other applicable laws; ensuring compliance with secretarial standards; and discharging prescribed duties.
In practice, the role commonly includes:
- supporting board and general meetings;
- maintaining statutory registers and governance records;
- coordinating MCA filings and regulatory correspondence;
- advising the board on company-law procedure;
- tracking approvals, disclosures and compliance calendars;
- supporting directors with agenda papers, minutes and action items; and
- escalating material defaults to the appropriate decision-makers.
The Company Secretary should have direct access to the board and sufficient authority to raise compliance concerns.
Step-by-step appointment procedure
Confirm applicability and effective date
Verify the company category, paid-up share capital and the date on which the threshold is or will be reached.
Select an eligible candidate
Verify ICSI membership, experience, conflicts and ability to accept whole-time employment.
Prepare the appointment terms
Define designation, duties, reporting line, remuneration, term, confidentiality, authority and performance expectations.
Issue board-meeting notice
Follow section 173, the Articles and applicable Secretarial Standard requirements.
Pass the board resolution
Approve the appointment and record the terms and remuneration as required by section 203.
Issue and accept the appointment letter
Execute the employment documentation and preserve the candidate's consent and membership evidence.
Complete the MCA filing
Use the current DIR-12 workflow, correct designation, effective date, attachments and filing fee.
Update statutory and operational records
Update the KMP register, board records, compliance responsibility matrix and authorised portal access.
Documents required
MCA filing and statutory records
The appointment of a whole-time Company Secretary is ordinarily recorded through the current DIR-12 process. The company should verify the live MCA form, filing period, attachments, certification requirements and fee before submission.
After filing, update the register maintained under section 170, the board and KMP records, organisational chart, compliance calendar and authorised signatory details where relevant.
Do not assume MGT-14 automatically
The filing position for board resolutions depends on section 117, the company's status and applicable exemptions. Confirm whether the specific resolution must be filed rather than using a generic checklist.
Vacancy and restrictions on multiple offices
Section 203 requires the board to fill a vacancy in the office of whole-time KMP within six months from the date of vacancy. A resignation, removal, death, disqualification or other cessation should therefore trigger an immediate replacement plan.
A whole-time KMP cannot ordinarily hold office in more than one company at the same time except in its subsidiary company, subject to section 203. The board should verify the candidate's existing offices before appointment.
When voluntary appointment makes sense
A company below the statutory threshold may appoint a whole-time or internal Company Secretary voluntarily where it has institutional investors, several subsidiaries, frequent capital transactions, regulated operations or a complex board process.
Smaller companies may instead engage a Company Secretary in practice for defined advisory and certification work. That external engagement should not be described as a statutory whole-time appointment.
Consequences of non-compliance
Section 203 provides monetary penalties for a company that fails to comply with the KMP appointment requirements and for directors or key managerial personnel in default. The current statutory amount and continuing-default calculation should be checked against the live text when a default is assessed.
Beyond the statutory penalty, non-compliance can delay MCA filings, transactions, due diligence, fundraising and lender reviews. It can also leave board and statutory records without a clearly accountable compliance officer.
Where the threshold has already been crossed, document the date, begin recruitment, seek professional advice and correct the default without making false retrospective records.
Common mistakes
1. Using turnover instead of paid-up share capital
Rule 8A does not use annual turnover as the private-company trigger.
2. Confusing authorised capital with paid-up capital
The threshold is based on shares actually credited as paid-up under the Act.
3. Hiring a compliance manager who is not an eligible CS
A job title cannot replace statutory eligibility.
4. Treating an external practising CS as the whole-time employee
The offices and engagement models are different.
5. Filing DIR-12 with inconsistent dates
The resolution, appointment letter, form and register should use the same effective date.
6. Leaving a vacancy unattended
Use the six-month rule as a legal maximum and appoint earlier where possible.
7. Ignoring multiple-office restrictions
Verify existing KMP employment before appointment.
Check the capital threshold before the next board meeting
TargoLegal can help confirm applicability, prepare the board documents, review the appointment terms and coordinate DIR-12 and statutory-record updates.
Request Company Secretary appointment supportFrequently asked questions
What is the private-company threshold for a whole-time Company Secretary?
Rule 8A applies at paid-up share capital of ₹10 crore or more for a company not covered by Rule 8.
Is turnover relevant to the Rule 8A threshold?
No. Rule 8A uses paid-up share capital, not turnover.
Who can be appointed?
An eligible Company Secretary as defined under the Company Secretaries Act, 1980 and the Companies Act.
Who approves the appointment?
The board approves the whole-time KMP appointment and records the terms and remuneration.
Which ROC form is filed?
The appointment is ordinarily recorded through the current DIR-12 workflow. Check the live MCA form and attachments before filing.
How long can a CS vacancy remain open?
Section 203 requires the board to fill the vacancy within six months.
Can one person be whole-time CS of two unrelated companies?
Section 203 generally prevents whole-time KMP from holding office in more than one company simultaneously, except in its subsidiary company, subject to the statutory provisions.
Can a company below ₹10 crore appoint a CS?
Yes. Voluntary appointment may support governance, investment readiness and complex compliance needs.
Research sources
- India Code — Companies Act, 2013, including sections 2, 170, 203 and 205.
- India Code — Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
- India Code — Chapter XIII rules and related section 203 material.
- Ministry of Corporate Affairs — MCA portal for current DIR-12 forms, filing fees and workflows.
- Institute of Company Secretaries of India for membership and professional guidance.
