Guidance on Scale of Fees for Professional Services, 2020 by ICSI


 

  • Practicing Company Secretaries (PCS) render various value added services to corporate and individual clients under various statutes. With a view to harmonize the diverse practices followed by PCS while charging professional fees for rendering such services and to provide the guiding principles for fixing the fee, the Practicing Company Secretaries Committee of the Council of The Institute of Company Secretaries of India has issued this Guidance on Scale of Fees for various Professional Services rendered by Practicing Company
  • This Guidance on Scale of Fees for various Professional Services containing inter alia the scope of various professional services and the guiding principles for fixing the scale of fee would ensure transparency between the client and the PCS and also pave the way for a just and reasonable scale of fees to be charged by professionals on the basis of their experience, expertise, exposure, operational costs, associated risks, penalties for wrong certification and the market
  • The various professional services rendered by a PCS may broadly be categorised as–
    • signing and certification,
    • audit,
    • advisory or consultancy,
    • appearances on behalf of clients,
    • any other services, as may be approved by the Council in terms of Section 2(2) of the Company Secretaries Act, 1980
  • When clients engage a PCS for a host of professional services, they can choose to hire the PCS on a retainer basis or for a stand-alone project. The retainership basis is a better value for money, but sometimes the client needs proof that it is worth the investment, so the scope of work listed here will enable the PCS to “Charge what you’re worth but prove your ”
  • A standalone project based fee may be preferred when the professional service is concentrated in a particular
  • Before accepting any professional assignment, it would be advisable to the PCS if he, can access his skill sets and the infrastructure at his disposal to fulfil the assignment. The clients will be impressed by the honesty, and the PCS will be wasting less time and his prospects’ time. And, the clients will be more open to paying what the PCS’s really
  • The PCS may charge fee on any of the following basis:
  1. Hourly Rate – Expected earning per day / No. of working hours per day
  2. Daily Rate – Expected earning per day
  • Monthly retainer – Expected earnings as a salaried employee per month
  1. Project based rate (calculated by time) – Time required to complete an assignment x hourly rate or daily rate

 

1 As approved by the Council of the Institute of Company Secretaries of India at its 266th meeting held on 9th January, 2020.
  1. Value and ROI based – The perceived value creation for the client out of the professional assignment
  • The PCS may consider the following factors while determining the quantum of fee to be charged:
    • complexity of the
    • time required to complete the
    • risks, penalties for wrong certification (if any) associated with the
    • skill required to undertake and complete the
    • direct and indirect expenses, including overheads.
    • opportunity cost
    • fee usually charged by competitors for similar assignment by other
    • time limitations (urgency) imposed by the
    • the experience, reputation and seniority of the
    • limit on charging of fees under the statute (if any).
  • It is pertinent to note that Clause 9 of the First Schedule to the Company Secretaries Act, 1980 provides that a Company Secretary in Practice shall be deemed to be guilty of professional misconduct, if he– charges or offers to charge, accepts or offers to accept, in respect of any professional employment, fees which are based on a percentage of profits or which are contingent upon the findings, or result of such employment, except as permitted under any regulation made under this
  • The professional may fix a minimum base fee for various professional services. A markup on the base fee may be made so as to provide for cost of inflation, value addition on account of professional experience, turnover of the client company, nature of the company whether private, public or listed and the
  • The Illustrative list of weights for putting a markup is as under:

Description

Factor

Cost of Inflation (x) = (Current Year Index/100)

x

Compensation for years of experience (0-5 yrs / 6-10 yrs / 11-15 yrs / 16 yrs or more) = y

0.2 / 0.4/0.6/0.8

Markup on account of Turnover of the client company (uptoRs 1 crore / Rs. 1 core to Rs 5 crore / Rs 5 crore to Rs 10 crore / Rs. 10 crore and above) = z

0.05 / 0.10 /

0.15 / 0.20

Nature of the company (pvt., public, listed) = t

0.13 / 0.26 /

0.39

Net markup on base fee (M)

x + y + z + t

Example:

Project based rate for a professional assignment = Rs. 5000 Current year inflation index = 109

No. of years of experience = 10 Turnover of client = 90 lakh

Nature of company = Private Limited

Net Markup on Base Fee is calculated as under:

Description

Factor

Cost of Inflation (x) = (Current Year Index/100)

1.09

Compensation for 10 years of experience = y

0.4

Markup on account of Turnover of the client company= z

0.05

Nature of the company (pvt. limited) = t

0.13

Net markup on base fee (M) = x + y + z + t

1.67

Therefore, the Project based rate for a professional assignment after adjustment for the markup would be = 5000 x 1.67 = Rs. 8350/-

  • Accordingly, the professional fee after providing for the markup would be as under:

i.         Hourly Rate x M

  1. Daily Rate x M

iii.         Monthly retainer x M

  1. Project based rate (calculated by time) x M
  2. Value and ROI based x M
  • The following are a few guiding principles to help PCS determine the basis of charging of fees to the clients based on the nature of

COMPANY LAW MATTERS

Sl. No.

Professional Assignment and Scope of Work

Basis

Expected

Man Hours

1.

Getting Companies registered with the Registrar of Companies within the state

 

·                   Acquiring Digital Signature Certificate(DSC)

·                   Acquiring Director Identification Number(DIN)

·                   Filling and Filing of eForm

·                   Name Approval

·                   Incorporation of the company

Project based rate

 

2.

Getting Companies registered with the Registrar of Companies outside the state

 

·                   Acquiring Digital Signature Certificate(DSC)

·                   Acquiring Director Identification Number(DIN)

·                   Filling and Filing of eForm

·                   Name Approval

·                   Incorporation of the company

Project based rate

 

3.

Maintaining necessary records and registers as required under the Companies Act, 2013

·         MGT-1: Register of Members

·         MGT-2: Register of Debenture Holders

·         Index of Members

·         Index of Debenture Holders

·         Register and Index of Beneficial Owners

·         MGT-3: Foreign Register of Members, Debenture holders, other security holders or beneficial owners residing outside India

·         Form SH-2: Register of Renewed and Duplicate Share Certificate

·         Form SH-3: Register of Sweat Equity Shares

Monthly retainer

 

 

·         Form SH-6: Register of Employee Stock Options

·         Form SH-10: Register of Shares or Securities Bought Back

·         Register of Directors and KMPs

·         Register of Deposits

·         Form CH-7: Register of Charges

·         Form MBP-2: Register of Loans/Guarantee/Security and Acquisition by Company

·         Form MBP-3: Register of Investments not held in its own name

·         Form MBP-4: Register of Contracts or Arrangements in which Directors are interested

·         Board Meeting Minutes Book

·         General Meeting Minutes Book (i.e. AGM, EGM, Postal Ballot, Creditors Meetings, Debenture holders Meetings)

·         Books of Accounts/Financial Statements

·         Register of Directors Attendance at Board/Committee Meetings.

 

 

4.

Preparing and filing necessary documents including Annual Reports etc. with Registrar of Companies.

·         Form 23AC : For filing Balance Sheet (applicable to all Companies other than select class of Companies)

·         Form 23ACA: For filing Profit & Loss Account (applicable to all

Companies other than select class of Companies)

·         Form 23AC-XBRL: For filing Balance Sheet in XBRL format (applicable to select class of Companies)

·         Form 23ACA-XBRL: For filing Profit & Loss Account

(applicable to select class of Companies)

·         Form 20B : For filing Annual Return by Companies having share capital

·         Form 66: For filing Compliance Certificate by Companies

having paid up capital of Rs. 10 lakh - Rs. 2 crore

·         Form 21 A : For filing Annual Return by Companies not having share capital

·         Form AOC-4 : For filing financial statement and other

documents (For FY start on or after 01.04.2014)

·         Form AOC4- CFS: Form for filing statement containing salient features of consolidated financial statement of a group (For FY start on or after 01.04.2014)

·         Form AOC4-XBRL: For filing XBRL document in respect of

financial statement and other documents (For FY start on or after 01.04.2014)

·         Form MGT-7: Form for filing Annual Return by Companies

having share capital (For FY ending on or after 01.04.2014)

·         Pre-scrutiny of eForms

·         Filling and Filing of eForms

·         Rectification in eForms

Hourly Rate / Monthly Retainer

 

5.

Consultancy on various Company Law Matters

Hourly Rate

 

6.

Change of name, objects, registered office, etc.

Hourly Rate

 

7.

Consulting Services

Hourly Rate

 

8.

Initial Public Offer (IPO) or Public Issue related consultancy and support services

·         Hiring a merchant bank

·         Drafting the Red Herring document

·         Going on road show

·         Pricing the IPO

·         Making available to public

Hourly Rate

 

 

·         Going through with the IPO

 

 

9.

Issue based consultancy to Large scale Companies and

Listed Companies

Project based

rate

 

10.

Services of a Company Secretary on retainer basis to small and medium scale companies for which mandatory

appointment of Company Secretary is not required.

Monthly Retainer

 

11.

Drafting statutory documents

Project based

rate

 

12.

Liaison with regulatory authorities viz. Registrar of

Companies, Regional Director, etc. to obtain clearances and approvals under the Companies Act, 1956.

Value based rate

 

13.

Amalgamation, Merger and Restructuring

ROI based

rate

 

14.

Due diligence of companies

Value based

rate

 

15.

Devising Compliance Management System

ROI based

rate

 

16.

Winding-up and striking-off the name of Company

Project based

rate

 

17.

Petitions to Regional Director for Compounding of

Offences

Project based

rate

 

18.

Petitions to Company Law Board

ROI based

rate

 

19.

Secretarial Audit under Section 204 of the Companies

Act, 2013

Project based

rate

 

20.

Signing and Certification of Annual Return under Section

92 of the Companies Act, 2013.

Hourly Rate

 

21.

All services which can be provided by a Company

Secretary as per the Companies Act. 2013

Hourly Rate

 

22.

Legal Compliance Management System: Devising

Legal Compliance management system across the organization.

ROI based rate

 

23.

Legal Drafting: Drafting/Vetting of documents, such as

notices of general meetings, resolutions to be passed at board and general meetings.

Hourly Rate

 

24.

Joint Ventures: Advice on and drafting of Joint

Venture/Shareholders/Technical Collaboration Agreements, And other special or general documents,

such as agreements, deeds, guarantees, indemnities, etc.

Hourly Rate

 

25.

Corporate        Restructuring: Advice        on       capital restructuring, merger, amalgamation, demerger, issue of

capital, debentures, etc., reduction of  capital,, buy-back of shares, variation of shareholders’ rights, etc.

Hourly Rate

 

26.

Making declaration that all the requirements of the Companies Act, 2013 and the rules made thereunder in respect of registration and matters precedent or incidental

thereto have been complied with

Hourly Rate

 

27.

Certifying annual return of listed company

Hourly Rate

 

28.

Certifying annual return of a company having a turnover

of fifty crore rupees or more

Hourly Rate

 

29.

Certifying that the merger and amalgamation scheme is being complied with in accordance with the orders of the

Tribunal

Hourly Rate

 

30.

Certifying that the buyback of securities has been made

in compliance with the provisions of the Companies Act, 2013 and rules made thereunder

Hourly Rate

 

31.

Internal Audit of Companies

Project based

rate

 

32.

Declaration that the draft memorandum and articles of association have been drawn up in conformity with

Section 8 of the Companies Act, 2013 and rules made thereunder

Hourly Rate

 

33.

Acting as scrutinizer for e-voting process

Daily Rate

 

34.

Certifying half yearly return of Nidhi company

Hourly Rate

 

35.

Certifying return of statutory compliances with the

Registrar filed by Nidhi Company

Hourly Rate

 

36.

Overseeing    the    compliances    related    to    issue    of

depository Global Depository receipts and to provide compliance report

Project based rate

 

37.

Pre-certification of e-forms under the Companies Act,

2013

Hourly Rate

 

38.

Pre-certification of E-forms under the Limited Liability

Partnership Rules, 2009

Hourly Rate

 

SECURITIES LAWS MATTERS

 

Sl. No.

Professional Assignment

Rate (INR)

 

39.

Advice on requirements and compliance under various Regulations and Guidelines issued by SEBI, such as Take-over Regulations, Insider Trading Regulations, Disclosure & Investor Protection Guidelines, Guidelines on Preferential Allotments, Debenture Trustees Regulations, Prohibition of Fraudulent Trading & Unfair

Trade Practices Regulations, Buy-back Regulations, etc.

Hourly Rate

 

40.

Stock Exchange Regulations and Requirements under Listing Agreement

Hourly Rate /

Monthly Retainer

 

41.

Requirements of Corporate Governance Code under Listing Agreement

Hourly Rate / Monthly

Retainer

 

42.

Representations to SEBI

Hourly Rate /

Monthly Retainer

 

43.

Appearance before Securities Appellate Tribunal

Monthly

Retainer

 

44.

Certificate under Regulation 40(9) of SEBI (LODR) Regulations, 2015 that all certificates have been issued within thirty days of date of lodgement for transfer, subdivision, consolidation, renewal, exchange or

endorsement of calls / allotment services.

Monthly Retainer

 

45.

Half yearly Certificate under Regulation 56(1)(d) of SEBI (LODR) Regulations, 2015 regarding maintenance of

hundred percent, asset cover in respect of listed non convertible debt securities

Monthly Retainer

 

46.

Certificate of compliance to an investment adviser under

SEBI(Investment Advisers) Regulations, 2013

Monthly

Retainer

 

47.

Certificate of compliance conditions for listing on SME

platform of BSE Ltd.

Monthly

Retainer

 

48.

Compliance Certificate regarding compliance of conditions of Corporate Governance in terms of Schedule

V of SEBI (LODR) Regulations, 2015

Hourly Rate / Monthly

Retainer

 

49.

Annual audit of Research analyst or research entity in respect of Compliance with Regulation 25(3) of SEBI

(Research Analysts) Regulations, 2014

Project based rate

 

50.

Quarterly certificate with regard to reconciliation of the

Monthly

 

 

total issued capital, listed capital and capital held by depositories in dematerialised form in terms of Regulation

55A of SEBI (Depositories Participants) Regulations, 1996

Retainer

 

51.

Internal Audit of Portfolio Managers in terms of SEBI’s

Circular IMD/PMS/CIR/1/21727/03

Project based

rate

 

52.

Internal Audit of Stock Brokers / Trading Members / Clearing Members in terms of SEBI’s Circular

MRD/DMS/CIR-29/2008

Project based rate

 

53.

Internal Audit of Credit Rating Agencies in terms of

SEBI’s Circular SEBI/MIRSD/CRA/Cir-01/2010

Project based

rate

 

54.

Internal Audit of operations of the Depository Participants

Project based

rate

 

55.

Concurrent Audit in case of Demat Account opening,

control and verification of delivery instruction slips

Project based

rate

 

56.

Certification regarding issuance of securities to more than

49 and upto 200 investors in case of deemed public issue in terms of SEBI’s circular No. CFD/DIL3/CIR/P/2016/53

Hourly Rate

 

57.

Acting as financial valuer under SEBI (Infrastructure

Investment Trusts) Regulations, 2014

ROI based

 

58.

Acting as financial valuer under SEBI (Real Estate

Investment Trusts) Regulations, 2014

ROI based

 

FEMA MATTERS

 

Sl. No.

Professional Assignment and Scope of Work

Basis

 

59.

Consultation and Advisory Services

Hourly Rate/

Monthly Retainer

 

60.

Setting up of Joint Venture Company in India

Project based

rate

 

61.

Setting up of Wholly Owned Subsidiaries and Joint

Venture Companies Abroad

Project based

rate

 

62.

Opening of Liaison, project and branch offices in India

Project based

rate

 

63.

Drafting of foreign collaboration / joint venture /

technology transfer agreement etc.

Hourly Rate

 

64.

Liaison with Reserve Bank of India / Secretariat of

Industrial Approvals / Foreign

Value based

rate

 

65.

Investment Promotion Board etc. and obtaining

necessary approvals

ROI based

 

66.

Permissions for External Commercial Borrowings

ROI based

 

67.

Obtaining various permissions from RBI under FEMA

ROI based

 

GST AND CUSTOMS

 

Sl. No.

Professional Assignment and Scope of Work

Basis

 

68.

Registration of units / Companies under Goods and

Service Tax Act, 2017

Project based

rate

 

69.

GST consultancy on retainer basis to large, medium and

small units

Monthly

Retainer

 

70.

Devising system for proper Compliance of GST law and

procedures and Continuous monitoring of the system GST Refunds

ROI based rate

 

71.

GST Audit Support (GSTR-9-C)

Monthly

Retainer

 

72.

GST consultancy on case to case basis Attending show cause notices and presentation of case before GST and Excise and Service Tax Authorities viz. Assistant Commissioner, Commissioner, Central Excise Service Tax

Appellate Tribunal etc.

Monthly Retainer

 

73.

SVB Matters under Customs Act and Adjudication

Monthly

Retainer

 

74.

Registration Under EOU and STPI Schemes

Project based

rate

 

TAXATION MATTERS

 

75.

Acting as authorised representative before the Income Tax

authorities

Monthly

Retainer

 

76.

Acting as authorised representative under Rule 2(d)(i) of the Authority for Advance Ruling (Customs, Central Excise

and Service Tax) Procedures Rules, 2005

Monthly Retainer

 

77.

Acting as authorised representative before the Customs,

Excise and Service Tax Appellate Tribunal

Monthly

Retainer

 

78.

Appearing as authorised representative before VAT

authorities

Monthly

Retainer

 

NCLT MATTERS

 

Sl. No.

Professional Assignment and Scope of Work

Basis

 

79.

Drafting and filing of Petitions / replies/ applications in the matters of section 241- 242 of the Companies

Act, 2013 (Oppression and Mismanagement).

Project based rate

 

80.

Making appearances before NCLT in all matters including matters pertaining to Shareholders’ disputes, Merger and Amalgamation (M & A), Liquidation of the companies, Revival of companies, Compounding, Investigation of the affairs of the

company, Insolvency and bankruptcy Code. (IBC)

Daily Rate

 

81.

Representing / Arguing on behalf of Creditors in the

matters M & A.

Daily Rate

 

82.

Acting as Administrators / mediators for settlement of

disputes.

Daily Rate

 

INSOLVENCY AND BANKRUPTCY CODE MATTERS

 

Sl. No.

Professional Assignment

Rate (INR)

 

83.

Making Public Announcement of Corporate Insolvency

Resolution Process

Project based

rate

 

84.

Inventory of the claims from the creditors viz. financial,

operational, workmen and employees and others

Hourly Rate

 

85.

Formation of Committee of Creditors (CoC)

Hourly Rate

 

86.

Issue of notice and conducting First meeting of CoC

Hourly Rate

 

87.

Other roll as IRP as per the provisions of IBC, 2016

Daily Rate

 

88.

Appointment of Valuer for determination of fair value and

liquidation value of the corporate debtor

Hourly Rate

 

89.

Drafting of Information memorandum

Project based

rate

 

90.

Inviting resolution applicants for putting forward

resolution plan along with the evaluation matrix

Hourly Rate

 

91.

Conducting meetings of CoC as and when required

Daily Rate

 

92.

To examine each resolution plan submitted by Applicant,

with regard to all aspects, as laid down in IBC, 2016 including its implementation and supervision

Project based rate

 

93.

Defending claims against the company with NCLT/

NCLAT

Daily Rate

 

94.

To submit the resolution plan to Adjudicating Authority

Hourly Rate

 

95.

Any other act as required as per the provisions of IBC, 2016

Monthly retainer

 

CUSTOMS LAW AND EXIM POLICY MATTERS

 

Sl. No.

Professional Assignment and Scope of Work

Basis

 

96.

Obtaining Import Export License, Advance License and

other Licenses

Project based

rate

 

97.

Guidance on Export Procedures

Monthly

retainer

 

98.

Setting up of 100% Export Oriented Units/ Software

Technologies Park

Monthly

retainer

 

99.

Registration with Export Promotion Council

Project based

rate

 

100.

Obtaining Importer Exporter Code

Project based

rate

 

101.

Export Incentives

Project based

rate

 

FOREIGN TRADE POLICY MATTERS

 

Sl. No.

Professional Assignment and Scope of Work

Basis

 

102.

Certificate for issue of EPCG authorisation

Project based

rate

 

103.

Certificate for EPCG Redemption

Project based

rate

 

104.

Certificate showing sales turnover of ammunition (indigenous and imported) during the preceding three

licensing years

Project based rate

 

105.

Certification in respect of Application for Grant of Status

Certificate

Project based

rate

 

106.

Certificate in respect of application for Served from Indian

Scheme

Project based

rate

 

107.

Certificate for Agriculture Infrastructure incentive scrip

under VKGUY

Project based

rate

 

BANKING AND FINANCIAL MATTERS

 

Sl. No.

Professional Assignment and Scope of Work

Basis

 

108.

Company Law Consultancy

Monthly

retainer

 

109.

Consortium Bank Finance-Legal Due Diligence

Project based

rate

 

110.

Limited Review Due Diligence

Project based

rate

 

111.

Registration of Charges for Banks

Hourly Rate

 

112.

Getting Search of documents filed with Registrar of

Companies

Hourly Rate

 

113.

Issuing Diligence Report for Banks in terms of RBI

Circular DBOD No.Bp.BC.Pc.46/08.12.001/2008-09

Value based

rate

 

OTHER MATTERS

 

Sl. No.

Professional Assignment and Scope of Work

Basis

 

114

Acting as authorised representative before the

Competition Commission of India and Competition Appellate Tribunal

Daily Rate

 

115

Acting as authorised representative before the Central

Electricity Regulatory Commission

Daily Rate

 

116

Acting as authorised representative before the Telecom

Disputes Settlement and Appellate Tribunal

Daily Rate

 

117

Certifying that the company has complied with all the requirements relating to registration fees, share capital,

deposits and other requirements of the IRDA Act, 1999

Hourly Rate

 

118

Acting as authorised representative before the Board of

Daily Rate

 

 

Approval under the Special Economic Zones Rules, 2006

 

 

 

Acting as Trade Marks Agent

Hourly Rate

 

119

Certifying the documents for other Service Providers Registration for the entities which propose to provide the

services such as Teel-banking, Tele-medicine, Tele- trading, E-commerce, call centres, etc.

Hourly Rate

 

120

Certification regarding paid-up capital and net-worth under the Guidelines for Grant of Unified License (Virtual

Network Operators)

Hourly Rate

 

121

Internal Audit of Custodian Securities on Quarterly basis

under PFRDA (Internal Audit of Custodian Securities) Guidance Note

Project based rate

 

122

Acting as authorised representative before the Appellate Tribunal or a the Regulatory Authority or the adjudicating officer under the Real Estate (Regulation and

Development) Act, 2016

Daily Rate

 

123

Third Party Certification / Audit for Department of Labour,

Government of Haryana

Hourly Rate

 

124

Third Party Certification under transparent inspection

policy of Department of Labour, Government of Haryana

Hourly Rate

 

125

Certifying for Registration along with Articles of Association, Memorandum of Understanding, Details of Promoters / Partner / Shareholder, Net worth, Paid up Capital, Foreign Direct Investment in the company for the purpose of Application to Department of Telecommunications for Grant of Unified License (Virtual

Network Operators) / Authorisation for Additional Services

Hourly Rate

 

126

Certification for prescribed revenue details, latest profit and loss accounts, balance sheet and actual tax payment including service tax for previous financial year and the amount of advertisement revenue generated by the

Private FM Radio Stations during the financial year preceding the date of application.

Hourly Rate

 

14.       Immunity

The Practicing Company Secretary (PCS) shall be at liberty to determine his own scale of fee for rendering professional services. This guidance shall only be treated as guiding principles while fixing the fee. The PCS shall not incur any liability under the Code of Conduct as laid down under Schedule I & II of the Company Secretaries Act, 1980 and the Regulations framed thereunder, by reason of digression with this guidance.

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Source: ICSI


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