Secretarial Audit in India

Secretarial Audit in India
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In India, a Secretarial Audit is a process that involves the examination and verification of various compliances under the Company Law and other applicable laws, rules, and regulations. It is conducted by a qualified Company Secretary who provides an independent assessment of the company’s compliance with legal and procedural requirements. The primary objective of a Secretarial Audit is to ensure that the company adheres to statutory obligations and maintains good corporate governance practices.

Here are key aspects of Secretarial Audit in India:

### 1. **Legal Basis:**
– The concept of Secretarial Audit is primarily derived from the provisions of Section 204 of the Companies Act, 2013. According to this section, certain companies are required to obtain a Secretarial Audit Report from a practicing Company Secretary.

### 2. **Applicability:**
– The requirement for a Secretarial Audit is applicable to specific categories of companies, including:
– Every listed company.
– Every public company having a paid-up share capital of fifty crore rupees or more.
– Every public company having a turnover of two hundred fifty crore rupees or more.

### 3. **Appointment of Company Secretary:**
– The Secretarial Audit is conducted by a Company Secretary in Practice who is appointed by the Board of Directors of the company.

### 4. **Scope of Audit:**
– The Secretarial Audit covers various aspects, including compliance with the Companies Act, other corporate laws, rules, regulations, and guidelines relevant to the company’s business and operations.

### 5. **Review of Documents and Records:**
– The Company Secretary reviews relevant documents, records, registers, and filings to assess the company’s compliance with legal and regulatory requirements.

### 6. **Reporting:**
– After conducting the audit, the Company Secretary issues a Secretarial Audit Report, which includes observations and findings regarding the company’s compliance. The report is submitted to the Board of Directors.

### 7. **Content of Secretarial Audit Report:**
– The Secretarial Audit Report typically includes details about compliance with the Companies Act, adherence to corporate governance norms, disclosure requirements, and any non-compliance observed during the audit.

### 8. **Non-Applicability:**
– Small companies, one-person companies, and dormant companies are exempt from the requirement of a Secretarial Audit.

### 9. **Frequency:**
– The Secretarial Audit is an annual requirement. The report is prepared for each financial year and submitted to the Board within the prescribed time.

### 10. **Communication with Authorities:**
– If the Company Secretary, while conducting the audit, discovers any non-compliance, the same is communicated to the Board.

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