Companies Act – CHAPTER IV A
SECRETARIES AND TREASURERS
378. Appointment of secretaries and treasurers.
Subject to the provisions of this Chapter, a company may appoint a firm or body corporate as its secretaries and treasurers.
379. Provisions applicable to managing agents to apply to secretaries and treasurers with the exceptions and modifications specified in sections 380 to 383.
Subject to the exceptions and modifications specified in sections 380 to 383
(a) all the provisions of this Act applicable to, or in relation to, a managing agent which is a firm or body corporate shall apply to secretaries and treasurers; and
(b) all the provisions of this Act applicable to, or in relation to, any person or persons connected or associated in any manner with such a managing agent shall apply to, or in relationto, any person or persons connected or associated with secretaries and treasurers in the like manner; and subject as aforesaid 3[and unless the context otherwise requires], all references in this Act to a managing agent or any person or persons connected or associated in any manner with a managing agent shall be construed accordingly, as including a reference to secretaries and treasurers or to the person or persons connected or associated with them in the like manner.
1. Ins. by Act 65 of 1960, s. 141.
2. Proviso omitted by s. 142, ibid.
3. Ins. by s. 143, ibid.
380. Sections 324, 330 and 332 shall not apply to secretaries and treasurers.
381. Section 348 to apply subject to a modification.
Section 348 shall apply to secretaries and treasurers subject to the modification that for the words “ten per cent. of the net 1* * * profits” occurring in the section, the words “seven and a half per cent. of the net 1* * * profits” shall be substituted.
382. Secretaries and treasurers not to appoint directors.
Secretaries and treasurers shall have no right to appoint any director of the company; and sections 377 and 261 shall not apply to, or in relation to secretaries and treasurers, or persons connected or associated with them in the manner in which the persons specified in section 261 are connected or associated with managing agents.
383. Secretaries and treasurers not to sell goods or articles produced by Secretaries and treasurers shall have no right, unless, and except to the extent to which, they are authorised by the Board of directors, to sell any goods or articles manufactured or produced by the company or to purchase, obtain, or acquire machinery, stores, goods or materials for the purposes of the company, or to sell the same when no longer required for those purposes.
383A. Certain companies to have secretaries.
(1) Every company 3[having such paid-up share capital as may be prescribed] shall have a whole-time secretary, and where the Board of directors of any such company comprises only two directors, neither of them shall be the secretary of the company.
1[(1A) If a company fails to comply with the provisions of sub-section (1), the company and every officer of the company who is in default, shall be punishable with fine which mayextend to fifty rupees for every day during which the default continues:
Provided that in any proceedings against a person in respect of an offence under this sub-section, it shall be a defence to prove that all reasonable efforts to comply with theprovisions of sub-section (1) were taken or that the financial position of the company was suchthat it was beyond its capacity to engage a whole- time secretary.]
(2) Where, at the commencement of the Companies (Amendment) Act, 1974 (31 of 1974)
(a) any firm or body corporate is holding office, as the secretary of a company, such firm or body corporate shall, within six months from such commencement, vacateoffice as secretary of such company;
(b) any individual is holding office as the secretary of more than one company having a paid-up share capital of rupees twenty-five lakhs or more, he shall, within a period of six months from such commencement, exercise his option as to the company of whichhe intends to continue as the secretary and shall, on and from such date, vacate office as secretary in relation to all other companies.]
1. The word “annual” omitted by Act 65 of 1960, s. 144.
2. Ins by Act 41 of 1974, s. 30.(w.e.f. 1-2-1975).
3. Subs. by Act 31 of 1988, s.53 (w.e.f. 1-12-1988).
4. Ins. by s.53, ibid.
384. Firm or body corporate not to be appointed manager.
1[No company] shall, after the commencement of this Act, appoint or employ, or after the expiry of six months from such commencement, continue the appointment or employment of, any firm, body corporate or association as its manager.
385. Certain persons not to be appointed managers.
(1) No company shall, after the commencement of this Act, appoint or employ, or continue the appointment or employment of, any person as its manager who
(a) is an undercharged insolvent, or has at any time within the preceding five years been adjudged an insolvent; or
(b) suspends, or has at any time within the preceding five years suspended, payment to his creditors; or makes, or has at any time within the preceding five years made, a composition with them; or
(c) is, or has at any time within the preceding five years been, convicted by a Court in India of an offence involving moral turpitude.
(2) The Central Government may, by notification in the Official Gazette, remove the disqualification incurred by any person in virtue of clause (a), (b), or (c) of sub-section (1), either generally or in relation to any company or companies specified in the notification.
386. Number of companies of which a person may be appointed manager.
(1) No company shall, after the commencement of this Act, appoint or employ any person as manager, if he is either the manager or the managing director of any other company, except as provided in sub-section (2).
(2) A company may appoint or employ a person as its manager, if he is the manager or managing director of one, and not more than one, other company:
1. Subs. by Act 65 of 1960, s. 145, for certain words.
Provided that such appointment or employment is made or approved by a resolution passed at a meeting of the Board with the consent of all the directors present at the meeting, and of which meeting and of the resolution to be moved thereat, specific notice has been given to all the directors then in India.
(3) Where, at the commencement of this Act, any person is holding the office either of manager or of managing director in more than two companies, he shall, within one year from the commencement of this Act, choose not more than two of those companies as companies in which he wishes to continue to hold the office of manager or managing director, as the case may be; and the provisions of clauses (b) and (c) of sub-section (1) and of sub-sections (2) and (3) of section 276 shall apply mutatis mutandis in relation. to this case, as those provisions apply in relation to the case of a director.
(4) Notwithstanding anything contained in sub-sections (1) to (3), the CentralGovernment may, by order, permit any person to be appointed as a manager of more than two companies, if the Central Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common manager.
387. Remuneration of manager.
The manager of a company may, subject to the provisions of section 198, receive remuneration either by way of a monthly payment, or by way of a specific percentage,2* * *, of the “net profits” of the company calculated in the manner laid down in sections 349, 350 and 351, or partly by the one way and partly by the other:
3[Provided that except with the approval of the Central Government such remuneration shall not exceed in the aggregate five per cent. of the net profits.]
1. Sub-section (5) omitted by Act 65 of 1960, s. 146.
2. The words “not exceeding five” omitted by s. 147, ibid.
3. Ins. by s. 147, ibid.
388. Application of sections 269, 310, 311, 312 and 317 to managers.
The provisions of sections 1[269, 310], 311 and 317 shall apply in relation to the manager of a company as they apply in relation to a managing director thereof, and those of section 312 shall apply in relation to the manager of a company, as they apply to a director thereof.
388A. Sections 386 to 388 not to apply to certain private companies.
Sections 386, 387 and 388 shall not apply to a private company unless it is a subsidiary of a public company.]