Does a private company require a company secretary?

Does a private company require a company secretary?. In this article, we will take you through the provisions of Section 203 of the Companies Act, 2013, which deals with the appointment of key managerial personnel, including the requirement for companies to appoint a whole-time Company Secretary, Managing Director, or Chief Executive Officer. The section aims to ensure proper corporate governance and compliance with regulatory standards by mandating the presence of qualified professionals in key roles.
Applicable Provisions
The case involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Hyderabad, for consideration.
Facts of the Case with ROC and RD
SML Dyetex And Industries Private Limited, a company, was found to be in default of Section 203 of the Companies Act 2013. The appellants have filed the appeal under section 454 (4) of the Companies Act, 2013 against the RD adjudication order dated 15.11.2023 passes by the ROC for violation of section 203 of the companies Act 2013 as the company and its managing director had admitted that there was a non-compliance of provisions of above-mentioned section. 
ROC observed that the company has not appointed the whole-Time company secretary as required under section 203 (1) of the companies Act 203 (1) of the companies Act 2013 r/w Rule 8A of the companies (Appointment and Remuneration) Rules 2014 for the period 78 days.
ROC while imposing in his adjudication order stated that the company has failed to appoint Company Secretary since the applicable provisions of the Act came into i.e 02.11.2018 to till date despite to the felt company has exceeded the prescribed limit capital as stated in the provision of Section 203(1) of the companies Act, 2013.
The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD). The hearing was attended by the company's representative, a Practicing Company Secretary and contended that the:
• The company has reported loss from the financial year ended since 2012-13 to 2022 & 23 and is yet to overcome the financial problems. 
• Breakdown of COVID-19 and the imposition of lockdown by the governmental authorities further hampered the activities of the company and hindered the efforts to find a suitable candidate.
• That the company is not doing any operations and is supposed to apply for strike off, however due to pending charge the company is unable to proceed with the strike off. 
Imposed Penalty
The ROC after considering the fact and circumstances of the case levied penalties. The penalty amount was determined based on the company's failure to comply with the relevant legal requirements. The details of the penalty, are as follows
For non-appointment of Company Secretary:
• On Company:  Rs, 5,00,000
• On 2 Director: Rs. 5,00,000 each
Reduction in Penalty
Upon hearing the appeal, the RD reviewed the circumstances surrounding the non-compliance. The company’s arguments, including mitigating factors and potential rectifications, were considered. Consequently, the RD exercised its discretion to reduce the penalty amount as follows:
For non-appointment of Company Secretary:
• On Company:  Rs, 1,00,000
• On 2 Directors: Rs. 75,000 each
Any Benefit of Section 446B of Companies Act
Section 446B of the Companies Act, 2013, provides for lesser penalties in cases involving small companies and startups. However, in Tethys Properties Private Limited, concerned RD has already reduce the amount of penalties after considering all the facts and circumstances up to a great extent.
Our observations:
The case of SML Dyetex And Industries Private Limited highlights the procedural aspects of penalty adjudication under the Companies Act, 2013. While the ROC initially imposed penalties for non-compliance, the RD provided a reconsideration platform, leading to a reduction in the penalty. This highlights the importance of timely appeals and the discretion available under the law to mitigate financial liabilities in justified cases. Companies must ensure adherence to statutory requirements to avoid penalties while also leveraging available legal remedies for relief when necessary.
Download MCA Adjudication Order:

In this article, we will take you through the provisions of Section 203 of the Companies Act, 2013, which deals with the appointment of key managerial personnel, including the requirement for companies to appoint a whole-time Company Secretary, Managing Director, or Chief Executive Officer. The section aims to ensure proper corporate governance and compliance with regulatory standards by mandating the presence of qualified professionals in key roles.

Applicable Provisions

The case involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Hyderabad, for consideration.

Facts of the Case with ROC and RD

SML Dyetex And Industries Private Limited, a company, was found to be in default of Section 203 of the Companies Act 2013. The appellants have filed the appeal under section 454 (4) of the Companies Act, 2013 against the RD adjudication order dated 15.11.2023 passes by the ROC for violation of section 203 of the companies Act 2013 as the company and its managing director had admitted that there was a non-compliance of provisions of above-mentioned section.

ROC observed that the company has not appointed the whole-Time company secretary as required under section 203 (1) of the companies Act 203 (1) of the companies Act 2013 r/w Rule 8A of the companies (Appointment and Remuneration) Rules 2014 for the period 78 days.

ROC while imposing in his adjudication order stated that the company has failed to appoint Company Secretary since the applicable provisions of the Act came into i.e 02.11.2018 to till date despite to the felt company has exceeded the prescribed limit capital as stated in the provision of Section 203(1) of the companies Act, 2013.

The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD). The hearing was attended by the company's representative, a Practicing Company Secretary and contended that the:

• The company has reported loss from the financial year ended since 2012-13 to 2022 & 23 and is yet to overcome the financial problems.

• Breakdown of COVID-19 and the imposition of lockdown by the governmental authorities further hampered the activities of the company and hindered the efforts to find a suitable candidate.

• That the company is not doing any operations and is supposed to apply for strike off, however due to pending charge the company is unable to proceed with the strike off.

Imposed Penalty

The ROC after considering the fact and circumstances of the case levied penalties. The penalty amount was determined based on the company's failure to comply with the relevant legal requirements. The details of the penalty, are as follows

For non-appointment of Company Secretary:

• On Company: Rs, 5,00,000

• On 2 Director: Rs. 5,00,000 each

Reduction in Penalty

Upon hearing the appeal, the RD reviewed the circumstances surrounding the non-compliance. The company’s arguments, including mitigating factors and potential rectifications, were considered. Consequently, the RD exercised its discretion to reduce the penalty amount as follows:

For non-appointment of Company Secretary:

• On Company: Rs, 1,00,000

• On 2 Directors: Rs. 75,000 each

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013, provides for lesser penalties in cases involving small companies and startups. However, in Tethys Properties Private Limited, concerned RD has already reduce the amount of penalties after considering all the facts and circumstances up to a great extent.

Our observations:

The case of SML Dyetex And Industries Private Limited highlights the procedural aspects of penalty adjudication under the Companies Act, 2013. While the ROC initially imposed penalties for non-compliance, the RD provided a reconsideration platform, leading to a reduction in the penalty. This highlights the importance of timely appeals and the discretion available under the law to mitigate financial liabilities in justified cases. Companies must ensure adherence to statutory requirements to avoid penalties while also leveraging available legal remedies for relief when necessary.