In the dynamic compliance environment today, corporate governance has become a key focus area. One important tool for ensuring better governance is the Secretarial Audit, introduced under the Companies Act, 2013.
But the big question is:
👉 Is every company required to file a Secretarial Audit Report?
👉 Does my company need to comply?
Let’s break it down in simple terms!
What is Secretarial Audit?
Secretarial Audit is a process to check compliance with various laws, rules, and regulations applicable to a company. It acts as an independent check on the company’s legal and procedural compliance.
It is conducted by an independent professional — a Practicing Company Secretary (PCS) — and not by the company’s statutory auditor (Chartered Accountant).
Who Needs to Obtain a Secretarial Audit Report?
Under Section 204 of the Companies Act, 2013, the following companies must mandatorily obtain a Secretarial Audit Report:
- Every Listed Company
- Every Public Company having:
The Secretarial Audit Report must be annexed with the Board’s Report in Form MR-3.
What About Private Companies?
- Private Companies are generally not required to obtain a Secretarial Audit Report unless they are subsidiaries of a listed company.
- However, if a Private Company meets the prescribed financial limits and becomes a deemed public company, it could be applicable.
If you are a private limited company, and you are NOT listed or NOT a subsidiary of a listed company, Secretarial Audit isnot mandatory for you.
What is Secretarial Compliance Report?
Additionally, under SEBI (LODR) Regulations, 2015, every listed entity must also obtain a Secretarial Compliance Report from a Practising Company Secretary for compliance with SEBI regulations.
How to Check Applicability for Your Company:
- Check if your company is listed on any stock exchange.
- If not listed, check if it is a public company.
- If a public company, check if your paid-up capital is ₹50 crore or more, or turnover is ₹250 crore or more.
If the answer to any of these conditions is Yes, Secretarial Audit is mandatory.
Otherwise, you are not required to file a Secretarial Audit Report.
Would you like me to share a simple checklist for Secretarial Audit?
Comment below!
