At Sharmila Mahesh Babu Associates, we provide Secretarial Audit services to help businesses stay compliant with corporate laws and regulatory frameworks. Our team of experienced Company Secretaries ensures that your company adheres to all statutory requirements, minimizing legal risks and enhancing corporate governance.

What is Secretarial Audit Service?

Secretarial Audit is a comprehensive compliance check conducted under Section 204 of the Companies Act, 2013, ensuring that companies comply with various corporate laws, SEBI regulations, FEMA, and industry-specific legal frameworks. It is mandatory for listed companies, public companies with a paid-up share capital of ₹50 crore or more, and private companies meeting prescribed thresholds.

Secretarial Audit Services Applicability

Secretarial Audit Services applies to:

Every listed company
Public companies with a paid-up share capital of ₹50 crore or more or turnover of ₹250 crore or more
Private companies that are subsidiaries of public companies falling under the above two categories
Foreign subsidiaries operating in India under FEMA compliance

Secretarial Audit Limit

A practicing Company Secretary can conduct Secretarial Audits for a maximum number of ten companies per financial year as per ICSI guidelines.

Why is Secretarial Audit Important?

A Secretarial Audit Service is not just a legal requirement but a proactive measure to ensure transparency and accountability. Companies failing to comply with statutory regulations may face severe penalties, reputational damage, and legal consequences. Our Secretarial Audit services help you:

Identify non-compliance and rectify issues before they escalate.
Strengthen corporate governance practices.
Gain investor confidence by ensuring legal transparency.
Ensure adherence to SEBI, Companies Act, and other regulatory frameworks.

Secretarial Audit Checklist

A Secretarial Audit covers various aspects, including but not limited to:

Compliance with the Companies Act, 2013 – Filing of necessary documents, board resolutions, and disclosures.
SEBI Regulations – Compliance with listing regulations, insider trading norms, and corporate governance requirements.
Foreign Exchange Management Act (FEMA) – Ensuring adherence to foreign investment policies and reporting norms.
Environmental & Industry-Specific Laws – Compliance with industry-specific regulations and environmental standards.
Board & Committee Meetings – Reviewing board decisions, minutes of meetings, and adherence to governance practices.
Regulatory Filings & Disclosures – Verification of returns submitted to MCA, SEBI, RBI, and other regulatory bodies.
Policies & Internal Controls – Reviewing the internal policies for risk management, related-party transactions, and financial disclosures.

Secretarial Audit Services Process

We follow a structured and risk-based approach to conducting a Secretarial Audit, ensuring a thorough assessment of corporate compliance.

Step 1: Understanding Your Business & Compliance Requirements

Reviewing the company’s business operations and industry-specific regulations.
Identifying applicable laws and compliance frameworks.

Step 2: Compliance Check & Document Review

Examining statutory registers, minutes of board meetings, and filings.
Verifying regulatory returns submitted to MCA, SEBI, RBI, and other authorities.

Step 3: Gap Analysis & Risk Assessment

Identifying non-compliance, potential risks, and regulatory gaps.
Evaluating governance structure and corporate policies.

Step 4: Corrective Measures & Recommendations

Advising on corrective steps to address compliance issues.
Providing governance best practices to strengthen compliance.

Step 5: Issuing the Secretarial Audit Report (MR-3 Format)

Preparing the Secretarial Audit Report in MR-3 format as per legal requirements.

Secretarial Adult Scope of Work

The scope of work for Secretarial Audit includes:

Verification of corporate records and documents
Examination of compliance with statutory laws
Evaluation of board processes, meetings, and resolutions
Analysis of shareholding structure and regulatory filings
Identification of gaps in internal control systems
Assessment of adherence to listing regulations (for listed entities)

Secretarial Audit for Private Limited Company

While Secretarial Audit is not mandatory for all private limited companies, it becomes applicable if:

The private company is a subsidiary of a public company meeting the audit criteria.
It has significant foreign investments, requiring FEMA compliance.
It voluntarily opts for Secretarial Audit to strengthen governance and ensure legal compliance.

Punishment for Default in Secretarial Audit

Section 204(4) of the Companies Act, 2013 states that any officer, official, or auditor found in violation of the Secretarial Audit provisions will be fined not less than ₹1 lakh and up to ₹5 lakh.

Power & Duties of Secretarial Auditor

The secretarial auditor plays a crucial role in auditing and compliance. Their duties include:

Offering guidance to company directors regarding their obligations, rights, and powers.
Analyzing corporate transactions and seeking clarifications from officers.
Ensuring that the business complies with all relevant laws, rules, and regulations.

Who can be Appointed as Secretarial Auditor

Only a practicing Company Secretary who is a member of the Institute of Company Secretaries of India (ICSI) can conduct a Secretarial Audit and issue the Secretarial Audit Report (MR-3).

GET PROFESSIONAL SECRETARIAL AUDIT SERVICES

Ensure your business stays legally compliant with our Secretarial Audit expertise. Contact Sharmila Mahesh Babu Associates today for a consultation and safeguard your company’s corporate governance.

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