Representation by CS members, Chennai on KMP Rules

CS members from Chennai had arranged for a meeting against KMP Rules of Companies Act - on 4th April, 2014 at ICSI - SIRC premises.

More than 250 members and Students had come for this meeting. We organized a signature campaign and all the members & students assembled there signed it.



We then went to meet ROC & Regional Director at Shastri Bhawan. We submitted a copy of the petition to them.

The copy of the petition given is given below.

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4^th April, 2014

Mr. Naved Masood IAS   

Secretary to Government of India,

Ministry of Corporate Affairs

Shastri  Bahavan,

New Delhi 110 001

 Dear Sir,

  

Sub: Representation about KMP Rules notified by Ministry of Corporate Affairs.

Ministry of Corporate Affairs has recently notified 282 Sections and related Rules. The KMP Rules released by MCA on 31^st March has shocked the Company Secretary fraternity across India.

The KMP Rules are making it mandatory to have Company Secretaries only for 7000 companies. This will adversely affect the compliance with applicable laws, Secretarial Standards and governance norms, etc., of the Companies which are excluded in the above notification. Also, it will affect the livelihood of members of ICSI.

If the Rules are implemented as such, the life of more than 4,00,000 students who have registered for this course will be at jeopardy. They have taken this course based on the earlier law which provided all Companies having more than 5 crore paid up capital need to have a Company Secretary. Now if the Government takes it back, they will feel let down and face an insecure future.

The Companies Act, 2013 has increased the compliance requirement of all the Companies including Private Limited Companies. But it is surprising that it has done away with the requirement of having a Company secretary for Private Limited Companies and for Public Limited Companies having less than Rs.10 Crores share capital.  While the intention of the law is for increased Compliance for all Companies, it is sad that the Rules are not reflecting it.

Further, Rule under Section 204(1) mandate to have secretarial audit. But out of approximately 13 lakh Companies registered in India, less than 1% of the Companies alone would get covered by Secretarial audit, as Private Limited Companies are completely exempt from Secretarial audit.  We are not sure how the Government will ensure compliance in other Private Limited Companies having more loans, turnover, etc which also will require lot of compliance.

Further ministry has done away with precertification which was introduced after detailed deliberations. As a consequence, authentic information would not be available promptly to stakeholders and this would also drastically reduce the utility of MCA 21.

The Company Secretaries who are the knowledgeable professionals can do a thorough verification and can thereby reduce the risk for the Directors, who are professionals, but since they do not have expert knowledge in this regard, can make mistakes in filling and filing the important information in the Forms. Further it will also increase the work load of ROC offices to a great extent and can reduce its efficiency.

Please find enclosed the representations submitted by our President to Ministry of Corporate Affairs.

  

We the undersigned members, request you to please consider the said representation and make the necessary changes as mentioned in the attached petitions and ensure compliance of all Acts which needs to be followed by the Companies and also to save our profession.

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We have sent the petition copy signed by us to Secretary, Ministry of Corporate Affairs by Speed post along with photos taken today. 

Being the first meeting, it was organized without writing a single mail or SMS to any member and please purdon us for not informing about this meeting in advance.

We sincerely thank each one of the member & student who came and shared their emotions and anger.

Going forward, our meetings will be conducted after informing through mail and FB.

CS across India need to be together and voice our concern and ensure that KMP Rules are changed.

We will not rest until these Rules are changed.
We will not rest until these Rules are changed.

CS members: we are fighting for your and our liveli hood.. Please be with us & support this noble cause...