Removal of a Company Secretary Under the Companies Act, 2013

A Company Secretary (CS) is a Key Managerial Personnel (KMP) under the Companies Act 2013. The position carries significant legal responsibility, so removing the person in that role is not a simple administrative action. The law prescribes a defined procedure for the removal of a company secretary and mandates ROC filings within strict timelines. It imposes financial penalties for every step done incorrectly or late. 

Many companies treat CS removal like a standard employment termination. The general resignation and notice period approach creates legal exposure, damages the company’s compliance record, and, in some cases, allows the removed CS grounds to challenge the decision.

This guide explains the complete procedure for the removal of a Company Secretary under the Companies Act 2013. It also covers valid grounds, required forms, filing timelines, penalties, and post-removal compliance requirements for companies.

What is a Company Secretary Under the Companies Act 2013?

Section 2(24) of the Companies Act, 2013 defines a Company Secretary as a qualified professional appointed to perform secretarial functions. Section 2(51) classifies the Company Secretary as a Key Managerial Personnel alongside the Managing Director, CEO, and CFO. Overall, the CS acts as the main compliance officer and performs the Rights and Duties of the Company Secretary under the Act.

The Company Secretary also acts as a link between the company and the Registrar of Companies for regulatory communication. Key responsibilities under Section 205 of the Companies Act 2013, and relevant rules, include the following important compliance functions:

• Ensuring compliance with secretarial standards issued by ICSI and applicable provisions of the Companies Act.
• Reporting to the Board about compliance status and highlighting any legal risks or governance issues.
• Conducting board meetings, preparing agendas, and maintaining minutes as per prescribed standards.
• Maintaining statutory registers and records required under the Companies Act and related rules.
• Filing returns and forms with the ROC and other authorities within prescribed timelines.

Can a Company Secretary Be Removed?

Yes, the removal of the company secretary is legally allowed under the Companies Act, 2013, and the Board holds this authority. Unlike director removal, which requires shareholder approval under Section 169, removal of a Company Secretary remains a Board decision. However, the Board must follow proper legal procedures and cannot remove the Company Secretary arbitrarily.

The company must follow principles of natural justice, which require proper notice and an opportunity for the Company Secretary to respond. The Board must provide clear reasons and consider the response before passing the removal resolution. 

Valid Grounds for Removal of a Company Secretary

The Companies Act, 2013, does not specify an exhaustive list of grounds for the removal of a Company Secretary. However, the following grounds are widely recognized, legally defensible, and supported by established corporate governance practices:

• Misconduct or negligence: The Company Secretary fails to perform statutory duties properly, misses filing deadlines, or weakens the company’s compliance position. This remains the most common ground for the removal of the company secretary.
• Non-compliance with the Companies Act: Persistently fails to file returns, maintain statutory registers, circulate minutes on time, or follow secretarial standards issued by ICSI.
• Breach of confidentiality: Unauthorized disclosure of sensitive business information, board decisions, or financial data to third parties outside the company.
• Conflict of interest: The CS holds a personal interest that conflicts with the company’s interests without making proper disclosures to the Board.
• Loss of board confidence: The Board loses trust in the Company Secretary due to repeated issues, making effective working relationships difficult. The company must document specific incidents that clearly justify the loss of confidence.
• Restructuring or operational reasons: The company undergoes a merger, downsizing, or restructuring. Alternatively, the company’s paid-up capital falls below ₹10 crore, making the CS appointment no longer legally mandatory under Section 203.

Important Note: The Board must clearly record the exact reason for removal in the board resolution with proper supporting facts. Vague statements such as “the CS is no longer required” without justification may allow the Company Secretary to challenge the decision legally.

Step-by-Step Procedure to Remove a Company Secretary

To ensure legal compliance and avoid penalties, the company must follow a structured process while removing a Company Secretary:

Step 1: Issue a Show-Cause Notice to the CS

Before calling any board meeting, the company must issue a formal show-cause notice to the CS. This notice must:

• State the specific grounds on which removal is being considered.
• Give the CS a minimum of 7 to 15 days (as per employment contract terms) to respond in writing.
• Inform the CS of the right to present their case before the Board.

This step is not optional. It upholds the principle of natural justice and protects the company from a challenge on procedural grounds. If the CS submits a written response, the Board must review it before proceeding to a resolution.

Step 2: Convene a Board Meeting

Once the show-cause notice period has passed and the response has been reviewed, the company issues a formal notice of a Board meeting under Section 173 of the Companies Act 2013. The notice must:

• Be sent to all directors at least 7 days before the meeting date.
• Include the agenda specifying “removal of CS” as a line item.
• Be accompanied by the relevant background documents.

Step 3: Pass the Board Resolution

At the board meeting, the directors deliberate on the matter and pass an ordinary board resolution for the removal of the CS. The resolution must:

• Name the CS being removed with full designation.
• Record the specific grounds for removal as established in the show-cause process.
• State the effective date of removal.
• Be signed by the Chairman and recorded in the minutes of the meeting.

No special resolution is required from shareholders for CS removal unless the company’s Articles of Association specifically mandate it. The Board alone has this authority under Section 203.

Step 4: Issue a Formal Termination Letter

After the resolution is passed, the company issues a written termination letter to the CS. The letter must state:

• The effective date of cessation.
• The reason for removal is recorded in the board resolution.
• Any settlement terms, notice pay, or handover obligations.
• Instructions for returning company property, documents, and access credentials.

The termination letter creates a formal record of the date of cessation, which is critical for accurate DIR-12 filing.

Step 5: File Forms with the ROC

This step is the most compliance-critical part of the procedure for the removal of the company secretary and requires strict accuracy. The company must file the required forms with the Registrar of Companies within 30 days from the date of the board resolution:

Form	Purpose	Applicable To	Filing Deadline
DIR-12	Intimates ROC about cessation of CS as KMP	All companies	Within 30 days of board resolution
MGT-14	Files the board resolution with ROC	Listed companies and public companies	Within 30 days of passing resolution

Documents to attach with DIR-12 for removal of Company Secretary:

• Certified copy of the board resolution for removal
• Notice of the board meeting
• Termination letter issued to the CS
• Resignation letter from the CS, if the removal follows a mutual separation

Note on MGT-14: Private limited companies are not required to file MGT-14 for CS removal unless they are also public companies or listed entities. If the company’s Articles require shareholder approval and a special resolution is passed at a general meeting, MGT-14 must be filed within 30 days of that resolution as well.

Listed companies must also inform the relevant stock exchange about the change in Compliance Officer under the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations.

Step 6: Update the Statutory Registers

After filing the ROC forms, the company must update:

• The Register of Directors and Key Managerial Personnel is maintained under Section 170 of the Companies Act 2013, recording the date of cessation of the CS.
• The Register of KMPs is maintained separately.
• Any internal HR records and authorized signatory lists with relevant banks and authorities.

If the company fails to update the Register under Section 170, it creates a separate compliance default and can attract additional penalties. Following these requirements is extremely crucial for companies wishing to get legally registered like Private Limited Company Registration or OPC.

Penalties for Non-Compliance in Company Secretary Removal

Under Section 203(5) of the Companies Act 2013, the following penalties apply when the removal procedure is not followed correctly, or the DIR-12 filing is delayed beyond 30 days:

Who Defaults	Penalty
The company	₹5,00,000
Every defaulting director or KMP	₹50,000 each
Continuing default	Additional ₹1,000 per day, capped at ₹5,00,000

Beyond these penalties, if a company fails to appoint a Company Secretary within 6 months where appointment remains mandatory, the law treats it as a continuing default. Section 203(4) applies in such cases and attracts the same penalty structure until the company corrects the default.

What Happens After the Company Secretary is Removed?

Once the removal of the company secretary is complete, the company must take immediate steps to maintain compliance and avoid penalties. The Companies Act, 2013, places strict obligations on companies regarding vacancy management and continued compliance.

a. Mandatory Appointment of a New CS

Section 203(4) of the Companies Act 2013 requires the Board to fill any KMP vacancy at a board meeting within 6 months from the date of the vacancy. A company mandatorily required to have a CS under Section 203 cannot leave the position vacant beyond this period.

b. Interim Handling of CS Duties

During the vacancy period, the Board may assign day-to-day secretarial tasks to a senior officer or engage a Practicing Company Secretary (PCS) for interim compliance work. However, a PCS cannot sign statutory forms and returns that specifically require a whole-time CS under the Act. The company must be aware of this limitation to avoid filing errors during the transition.

c. Impact on Compliance

A CS vacancy affects the company’s ability to sign certain ROC filings, hold board and general meetings in full compliance with secretarial standards, and maintain SEBI LODR compliance for listed entities. The longer the vacancy continues, the greater the compliance exposure. The company should prioritize the appointment of a replacement CS without delay, especially if the business is vying for legal company registration.

Resignation vs Removal of a Company Secretary

Understanding the difference between resignation and removal of the company secretary helps companies follow the correct legal process and avoid compliance issues. Both situations require ROC filings and proper documentation, but the initiation and intent remain different:

Basis	Resignation	Removal
Who Initiates	The Company Secretary initiates the resignation voluntarily based on personal or professional reasons	The Board of Directors initiates the removal based on valid grounds and documented reasons
Reason	The Company Secretary decides to leave the position without any compulsion from the company	The Board decides removal due to misconduct, non-compliance, or operational requirements
Prior Notice to CS	Not applicable because the Company Secretary initiates the decision independently	Mandatory, as the company must provide notice and an opportunity to be heard
Board Resolution Required	The Board passes a resolution to formally accept the resignation of the Company Secretary	The Board passes a resolution to approve and authorize the removal of the Company Secretary
ROC Form	The company must file Form DIR-12 within 30 days to report the resignation to the ROC	The company must file Form DIR-12 within 30 days to report the removal to the ROC
MGT-14 (listed/public companies)	Applicable and must be filed within 30 days where required	Applicable and must be filed within 30 days where required
Effective Date	The resignation becomes effective from the date mentioned in the resignation letter or accepted by the Board	The removal becomes effective from the date mentioned in the termination letter issued by the company
Replacement Timeline	The company must appoint a new Company Secretary within six months if the appointment remains mandatory	The company must appoint a replacement within six months if required under Section 203

How RegisterKaro Helps with CS Removal?

The removal of a Company Secretary involves multiple legal steps, each with strict deadlines and documentation requirements. A missing document in DIR-12, an incorrectly prepared resolution, or a delayed ROC filing can lead to penalties under Section 203(5) and create compliance risks.

We assist businesses with the accurate and timely filing of Form DIR-12 to report the cessation of the Company Secretary. Our team ensures proper documentation, correct attachments, and error-free submission within the prescribed timeline.

We also provide Pvt Ltd compliance services to support companies with ongoing ROC filings, statutory record maintenance, and regulatory requirements. Our approach helps companies stay compliant and avoid penalties during and after the transition. Contact us today!

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