Amendment in the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

MCA vide its Notification dated January 3, 2020 has notified the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020 (‘Amendment Rules’). Following are the highlights of the Amendment Rules:

1. Threshold for appointment of whole-time CS re-defined: Every private company having a paid-up share capital of ten crore rupees or more shall have a whole-time company secretary (CS). Earlier, the requirement was limited to companies having paid-up share capital of five crore rupees or more;

1. Wider scope for Secretarial Audit: Henceforth,Secretarial audit shall be mandatory for every company having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more. Other companies on which secretarial audit was already applicable included:
   1. Listed companies;
   2. Every public company having a paid-up share capital of fifty crore rupees or more; or
   3. Every public company having a turnover of two hundred fifty crore rupees or more

It has been further clarified by MCA that the paid-up share capital, turnover or outstanding loans or borrowings (as the case may be) existing on the last date of latest audited financial statement shall be taken into account.