Companies Act 2013 Section 153

Companies Act Section 153 deals with the appointment of a company secretary in certain classes of companies. It ensures that companies maintain proper corporate governance by having a qualified professional to oversee compliance with statutory requirements.

This section is crucial for directors, shareholders, and professionals as it mandates the presence of a company secretary who acts as a bridge between the company and regulatory authorities. Understanding this section helps companies avoid penalties and ensures smooth management of legal formalities.

Companies Act Section 153 – Exact Provision

This provision mandates that companies meeting certain criteria must appoint a whole-time company secretary. The company secretary plays a vital role in ensuring compliance with the Companies Act and other applicable laws. They assist the board in governance and statutory obligations.

• Applies to listed companies and companies with paid-up capital ≥ ₹10 crore.

• Requires appointment of a whole-time company secretary.

• Ensures compliance with statutory and regulatory requirements.

• Supports board and management in governance matters.

Explanation of Companies Act Section 153

This section mandates the appointment of a whole-time company secretary for specified companies to ensure effective compliance management.

• States that listed companies and companies with paid-up capital of ₹10 crore or more must appoint a company secretary.

• Applies to companies, their boards, and the appointed company secretary.

• Requires the company secretary to be a qualified professional as per the Institute of Company Secretaries of India.

• Triggers upon meeting the paid-up capital or listing status criteria.

• Permits the company secretary to perform statutory duties and compliance functions.

• Prohibits companies from neglecting this appointment if criteria are met.

Purpose and Rationale of Companies Act Section 153

The section aims to strengthen corporate governance by ensuring companies have a qualified officer to oversee compliance and governance.

• Enhances transparency and accountability in corporate operations.

• Protects shareholders and stakeholders through proper compliance.

• Prevents corporate mismanagement and legal violations.

• Supports the board in fulfilling statutory duties effectively.

When Companies Act Section 153 Applies

This section applies when a company is listed or has a paid-up share capital of ₹10 crore or more, triggering the need for a company secretary.

• Applicable to all listed companies regardless of capital.

• Applicable to unlisted companies with paid-up capital ≥ ₹10 crore.

• Must comply from the date of meeting these thresholds.

• Exemptions may apply to smaller companies or those below thresholds.

Legal Effect of Companies Act Section 153

This provision creates a mandatory duty for qualifying companies to appoint a whole-time company secretary. It imposes compliance obligations and requires disclosures related to the appointment.

Non-compliance can lead to penalties and affect the company’s legal standing. The section interacts with MCA rules regarding filings and disclosures of the company secretary’s appointment.

• Creates a statutory duty to appoint a company secretary.

• Mandates disclosures in annual returns and board reports.

• Non-compliance attracts fines and possible prosecution.

Nature of Compliance or Obligation under Companies Act Section 153

Compliance is mandatory and ongoing for companies meeting the criteria. The obligation rests primarily on the board of directors to ensure timely appointment and reporting.

The company secretary’s role impacts internal governance by facilitating statutory compliance and advising the board.

• Mandatory and continuous obligation.

• Responsibility lies with the board of directors.

• Company secretary acts as compliance officer and governance advisor.

Stage of Corporate Action Where Section Applies

The section applies mainly at the stage of board decision-making regarding appointments and during ongoing compliance and disclosures.

• Appointment at board meeting stage.

• Disclosure in annual filings and board reports.

• Ongoing compliance monitoring by the company secretary.

Penalties and Consequences under Companies Act Section 153

Failure to appoint a company secretary when required can result in monetary penalties on the company and officers responsible. Repeated defaults may attract higher fines and prosecution.

• Monetary fines on company and officers.

• Possible prosecution for continued non-compliance.

• Impact on company’s regulatory standing and reputation.

Example of Companies Act Section 153 in Practical Use

Company X, a listed entity, failed to appoint a whole-time company secretary after crossing the ₹10 crore paid-up capital threshold. The Registrar of Companies issued a notice, and the company promptly appointed a qualified company secretary to comply with Section 153.

This action helped Company X avoid penalties and ensured proper governance and compliance going forward.

• Timely appointment avoids legal penalties.

• Company secretary supports compliance and governance.

Historical Background of Companies Act Section 153

This section replaced earlier provisions in the Companies Act, 1956, which had less stringent requirements for company secretaries. The 2013 Act introduced stricter norms to enhance governance.

• Shift from voluntary to mandatory appointment for certain companies.

• Introduced to align with global best practices in governance.

• Amended over time to clarify applicability and qualifications.

Modern Relevance of Companies Act Section 153

In 2026, Section 153 remains vital as companies increasingly rely on digital filings and e-governance. The company secretary ensures compliance with MCA portal requirements and supports ESG and CSR initiatives.

• Supports digital compliance and MCA e-filing.

• Facilitates governance reforms and transparency.

• Essential for practical corporate compliance management today.

Related Sections

• Companies Act Section 2 – Definitions relevant to corporate entities.

• Companies Act Section 149 – Appointment of directors.

• Companies Act Section 203 – Appointment of key managerial personnel.

• Companies Act Section 204 – Duties of auditors.

• IPC Section 420 – Punishment for cheating and dishonesty.

• SEBI Act Section 11 – Regulatory oversight for listed companies.

Case References under Companies Act Section 153

No landmark case directly interprets this section as of 2026.

Key Facts Summary for Companies Act Section 153

• Section: 153

• Title: Appointment of Company Secretary

• Category: Governance, Compliance

• Applies To: Listed companies and companies with paid-up capital ≥ ₹10 crore

• Compliance Nature: Mandatory, ongoing

• Penalties: Monetary fines, prosecution

• Related Filings: Annual returns, board reports

Conclusion on Companies Act Section 153

Section 153 of the Companies Act, 2013 is a cornerstone provision ensuring that companies maintain a qualified company secretary to oversee compliance and governance. This requirement enhances transparency and accountability, protecting the interests of shareholders and stakeholders alike.

For companies meeting the criteria, timely appointment and continuous engagement of a company secretary are essential to avoid penalties and uphold corporate integrity. The company secretary plays a pivotal role in bridging management and regulatory frameworks, making Section 153 crucial in modern corporate India.

FAQs on Companies Act Section 153

Who must appoint a company secretary under Section 153?

Listed companies and companies with a paid-up share capital of ₹10 crore or more must appoint a whole-time company secretary as per Section 153.

What qualifications are required for the company secretary?

The company secretary must be a qualified professional registered with the Institute of Company Secretaries of India (ICSI).

What are the penalties for non-compliance with Section 153?

Non-compliance can lead to monetary fines on the company and its officers, and repeated defaults may result in prosecution.

Is the appointment of a company secretary a one-time or ongoing obligation?

The appointment is ongoing; companies must continuously ensure the position is filled as long as they meet the criteria.

Does Section 153 apply to private companies?

It applies only if the private company’s paid-up share capital is ₹10 crore or more; otherwise, it is not mandatory.