Revised Secretarial Standards (SS-1): Key Changes Companies Must Know in 2024

Secretarial Standards play an important role in improving transparency, accountability and good governance in Indian companies. These Standards are issued by the Institute of Company Secretaries of India (ICSI) and help companies follow consistent procedures, especially when the law may not clearly explain certain situations.

The revised Secretarial Standards have come into effect from 1 April 2024. These updates mainly focus on improving the conduct of Board Meetings, ensuring clarity, and making compliance easier for companies. At Lawspicious, we guide businesses in understanding and following corporate law, governance rules and boardroom compliance. You can explore our services here:
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What Are Secretarial Standards?

Secretarial Standards provide a structured set of guidelines for day-to-day company operations, especially for meetings and documentation. While they give clarity, they do not replace the Companies Act, 2013. In case of conflict, the law always prevails.

The first Secretarial Standards were issued in 2015. Over the years, companies found certain areas difficult to follow. Based on feedback, ICSI revised and updated these Standards to make them more practical.

Major Changes Introduced in the Revised Secretarial Standards (SS-1)

Below is a simple explanation of the important updates made in Secretarial Standard-1 (SS-1), which deals with Board Meetings.

1. Scope of SS-1

Earlier, SS-1 applied to all companies except One Person Companies (with one director) and Section 8 companies. The updated version clarifies that:

• One Person Companies (with only one director) are exempt
• Section 8 companies are exempt

This means Section 8 companies do not need to follow SS-1 for Board Meetings.

2. Definition of Secretarial Auditor

The revised Standard now includes both an individual Company Secretary in Practice and a firm of Company Secretaries in Practice as eligible Secretarial Auditors.

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3. Proof of Sending Notice and Agenda

Earlier, companies had to maintain proof of sending notices, agenda and notes. The revised rule states that these records must be kept for a period decided by the Board, but not less than three years from the date of the meeting.

4. Director’s Intimation of Participation

A director can inform the company at the beginning of the calendar year about his intention to attend meetings through electronic mode. This declaration stays valid for the entire year.

However, directors can still choose to attend in person by giving advance notice.

5. Participation Through Electronic Mode

Directors may participate through electronic mode unless the law restricts it for specific items.

Important Update: Directors can now participate electronically even for restricted items (such as approval of financial statements, Board’s Report, mergers, takeovers) as long as a valid quorum is physically present.

6. Unpublished Price Sensitive Information (UPSI)

The reference to “material events under the listing agreement” has been removed from the definition of UPSI.

7. Frequency of Board Meetings

One Person Companies, Small Companies, Dormant Companies and Private Companies recognised as Startups may hold:

• One Board Meeting in each half of the year
• Minimum 90 days gap between two meetings

An adjourned meeting is treated as a continuation of the original meeting for the purpose of calculating intervals.

8. Meeting of Independent Directors

Independent Directors must now hold their separate meeting at least once in a financial year (earlier it was calendar year).

9. Quorum Rules

Earlier, an interested director could not be counted for quorum. The revised rule states:

• In a private company, an interested director can be counted for quorum after disclosing his interest.

Directors joining electronically will be counted for quorum except for restricted items, where quorum must be based on physical presence.

10. Chairman’s Role

If the Chairman has an interest in a matter, he must hand over the proceedings to another non-interested director. However, in private companies, the Chairman can still participate and be counted for quorum after disclosing his interest.

Conclusion

The revised Secretarial Standards reflect the commitment of regulators to strengthen corporate governance in India. Companies should review these changes, update their internal processes and ensure full compliance to avoid future issues.

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Frequently Asked Questions (FAQs)

1. When do the revised Secretarial Standards come into effect?

They apply from 1 April 2024.

2. Do Section 8 companies need to follow SS-1?

No. Section 8 companies are exempt.

3. How long should a company keep proof of notices and agendas?

For at least three years from the date of the meeting.

4. Can directors attend Board Meetings electronically?

Yes, including for restricted items, if a valid physical quorum is present.

5. Are independent directors required to meet separately?

Yes, at least once every financial year.