What is Company Law and why it is an important subject of CS Course?
Company law as a subject deals with following parts
- Structure of the company
- Management of the company
- Administration of the company
- Provisions related to conduct of affairs of company
Company Secretary follows company law during his whole professional life. You can also say that Company Secretary and Company law follow each other.
It is the prime duty of the Company Secretary to ensure that there are no defaults happening in the company.
He has to ensure that any dealing should not disrupt the smooth functioning of the company. Transparency and Accountability are other two important points which he has to take into consideration.
But how he is going to do all of this?
For achieving all these objectives and fulfilling his responsibilities, he has to follow some rules. This rule book and backend support is called the Company Law. This law makes CS understand all the rules and regulations required to be complied by any Company.
The knowledge of this subject is not only linked to the present of the Company Secretaries but also w.r.t. the future of all the students who aspire to become Company Secretaries.
Why Company Law is crucial?
We all know that every professional has to perform in his own area of work after clearing his professional exams. Hence after becoming Company Secretary, the practice of law, adherence of rules becomes crucial for all.
For this purpose only, Companies appoint Company Secretaries. For example, a cricketer loves cricket because it is his profession. Similarly this subject i.e. Company Law is crucial for the learning of the students because it is going to be your profession tomorrow.
Before you read more, check out these posts:
ICSI Company Secretary is the Compliance Officer of the Company
SEBI has mandated that the company secretary of the company will be the compliance officer of the company. Hence knowledge of company law is very important.
Now who is a Compliance Officer and why Company Secretary should act as Compliance Officer of the Company?
A compliance officer is an employee of a company that ensures the firm is in compliance with its outside regulatory and legal requirements as well as internal policies and bylaws. Compliance officers have a duty to their employer to work with management and staff to identify and manage regulatory risk.
As Compliance officers, Company Secretaries are also responsible for ensuring their organization complies with government regulations — domestically as well as globally, if applicable — and avoids missteps that could result in hefty fines, legal ramifications and reputation damage.
A Company has to Follow Various Laws
A company has to follow a number of laws and regulations depending upon the type of business it is into. There are numerous laws which it is required to be followed. A Company Secretary with its vast knowledge helps and supports the companies for adhering to these regulations.
ICSI Company Law Importance
Company Law is the basic law which is required to be followed by every company irrespective of its nature, size, domicile or type. For example as we all know there can be different types of companies which can be formed.
Be it public company, Private Company, One Person Company, Foreign Company, Government Company, Company Limited by Shares, Company limited by Guarantee , any Small or Big Company, every company is required to follow these rules and regulations.
Why Company is required to fulfil various laws?
A company is an artificial legal entity formed by a group of peoples. The funds are arranged and invested by various parties. The stakes of different parties are involved. Be it creditors, debtors, shareholders, everyone is interested in the performance of the company.
At the same time the ethics of the company dealings are also required to be ensured. This is because of the following reasons-
- Protecting interest of all third parties
- Large amount of funds of third parties are involved
- Public interest demands answerability from the officials
Company Law for Company Secretary -“CS KE SAATH BHI BAAD BHI“
You cannot think that once read in your curriculum , you will clear the exams and this subject will leave you after you join a job/ practice. Infact this subject will be an eternal part of your life. Whether you are in practice or job, you have to follow this and adopt this.
A company Secretary is always expected to have an expert knowledge of this subject. When he joins the organization, he is looked upon as one of the key personnel who will be having an expert knowledge over all the rules and regulations applicable to the company.
Hence you are expected to know each and every law, rule and regulation.
From the birth of the company i.e. incorporation of the company till its death i.e. Winding up/ Closure of the company, the Company Secretary needs to know everything. He is responsible for adherence of every statutory procedure.
Important note about Company Law
Other subjects of CS Course are also equally important and crucial but in any case this subject i.e. Company law is not optional to be learnt rather it is a food for soul for any Company Secretary. In Fact it’s a game changer for his life.
Although there are many challenges in learning this subject, but Unique Academy for commerce will make it easy for you. We are coming with various more interesting videos and lectures to make you aware about this subject.