What is Secretarial Audit & Why It Matters for Your Business

Compliance is not just a checkbox—it’s the backbone of responsible governance. For companies operating in India, especially those falling under the Companies Act, 2013, conducting a secretarial audit is both a statutory requirement and a strategic move toward sustained business growth.

Whether you're a startup scaling rapidly or a mature organization with complex structures, overlooking regulatory requirements can lead to penalties and legal hassles. That’s where a structured secretarial audit steps in—to identify gaps, streamline compliance, and reinforce your governance framework.

Understanding Secretarial Audit: A Brief Overview

A secretarial audit is an independent verification process conducted by a qualified Company Secretary (CS). The aim is to examine whether a company complies with applicable legal and procedural requirements.

It is mandated under Section 204 of the Companies Act, 2013 for:

• Every listed company

• Public companies with a paid-up share capital of ₹50 crore or more

• Public companies with a turnover of ₹250 crore or more

The audit ensures that the company has complied with laws such as:

• Companies Act, 2013

• SEBI regulations

• FEMA guidelines

• Other industry-specific laws and secretarial standards

Why Your Business Needs a Secretarial Audit

1. Proactive Risk Management
Secretarial audits help in identifying non-compliances before they escalate into legal challenges. It empowers management with actionable insights to mitigate risks early.

2. Enhanced Corporate Governance
Transparency and accountability are key pillars of corporate governance. Regular secretarial audits build trust among stakeholders and improve investor confidence.

3. Statutory Requirement
For certain companies, it’s a legal obligation. Non-compliance can result in penalties and damage to the company’s reputation.

4. Operational Clarity
Audits highlight procedural lapses—be it in filing resolutions, maintaining statutory registers, or conducting board meetings. Fixing these improves internal processes.

5. Investor & Market Confidence
A clean secretarial audit report enhances credibility with banks, investors, regulators, and potential partners.

What Does a Secretarial Audit Cover?

The scope of a secretarial audit usually includes the following:

• Checking board and committee meeting procedures

• Ensuring timely filing of forms and returns

• Verifying maintenance of statutory registers

• Compliance with SEBI and stock exchange regulations

• Monitoring changes in shareholding and corporate structure

• Assessing company policies in line with secretarial standards

• Ensuring due diligence in appointments, disclosures, and declarations

In essence, it offers a 360-degree check on legal and procedural compliance within the organization.

Who Conducts a Secretarial Audit?

Only a member of the Institute of Company Secretaries of India (ICSI) in practice is authorized to perform a secretarial audit. The auditor is expected to provide an independent opinion on whether the company is complying with applicable laws.

How Enterslice Can Help

At Enterslice, we specialize in delivering end-to-end secretarial audit services tailored to your industry and business needs. With a team of experienced Company Secretaries and legal experts, we ensure your company doesn’t just meet the minimum compliance bar—but sets the standard.

Our Secretarial Audit Process Includes:

• Preliminary compliance gap analysis

• Review of company records, registers, and filings

• Drafting and submission of Secretarial Audit Report (Form MR-3)

• Recommendations for rectification of observed lapses

• Ongoing compliance support and monitoring

Whether you’re a listed entity or a growing unlisted public company, Enterslice offers the strategic insights and compliance confidence you need.

Common Mistakes We Help You Avoid

• Late or missed filings of statutory returns

• Inadequate documentation of board/AGM meetings

• Gaps in shareholding disclosures or director declarations

• Non-maintenance of prescribed registers

• Unawareness of changes in regulatory norms

Avoiding these can save your company from hefty penalties and reputational setbacks.

Final Thoughts

Secretarial audit is more than a statutory ritual—it’s a mirror that reflects your company’s compliance health. Investing in a professional audit is an investment in your brand’s credibility, operational discipline, and long-term stability.

With Enterslice as your compliance partner, you gain peace of mind and the ability to focus on what truly matters—growing your business.

FAQs

1. Is secretarial audit mandatory for private companies?
No, it is not mandatory for all private companies. However, if a private company meets the threshold criteria of paid-up capital or turnover, it may require a secretarial audit.

2. What is the timeline for submitting the secretarial audit report?
The secretarial audit report must be annexed to the Board’s report in the company’s annual report, usually within 30 days of the AGM.

3. Can secretarial audit help in improving internal governance?
Yes. It highlights internal procedural gaps and enables the company to align better with governance norms.

4. Who signs the secretarial audit report?
A practicing Company Secretary who conducts the audit signs the report in Form MR-3.