Secretarial Audit

Key reasons why secretarial audit holds significant importance:

• Compliance with Corporate Laws: Secretarial audit helps businesses comply with various corporate laws and regulations enforced by the government. It ensures that the company’s actions, operations, and decisions are in line with the Companies Act, 2013 and other applicable laws.
• Prevention of Legal Consequences: By conducting a secretarial audit, companies can identify and rectify any non-compliance issues before they escalate into legal problems. It helps prevent penalties, fines, legal disputes, and reputational damage that could arise due to non-compliance.
• Risk Mitigation: Secretarial audit assists in identifying potential risks and weaknesses in the company’s governance, compliance, and internal control systems. By addressing these risks proactively, businesses can minimize the chances of fraud, mismanagement, and operational failures.
• Enhanced Corporate Governance: Secretarial audit plays a vital role in promoting good corporate governance practices. It ensures that the company operates with transparency, integrity, and accountability, which are essential for building trust among stakeholders and investors.
• Investor Confidence and Credibility: A thorough secretarial audit instills confidence in investors, lenders, and other stakeholders by providing an independent assessment of the company’s compliance and governance framework. 

The scope of secretarial audit covers a wide range of areas:

• Compliance with Company Law: Assessing the company’s compliance with the provisions of the Companies Act, including maintenance of statutory registers, filing of necessary forms and returns with the Registrar of Companies (RoC), and adherence to corporate governance requirements.
• Board and Shareholder Meetings: Evaluating the conduct of board meetings, including the preparation and circulation of agendas, minutes, and resolutions, ensuring compliance with the provisions of the Companies Act and the Articles of Association. 
• Secretarial Records: Examining the maintenance and preservation of secretarial records, such as board minutes, share registers, books of accounts, annual returns, and other important documents required by law.
• Regulatory Compliance: Verifying compliance with various regulatory authorities, including the Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI), and other relevant regulatory bodies. 
• Contracts and Agreements: Reviewing the company’s contracts and agreements to ensure compliance with legal requirements and verifying that the necessary approvals and authorizations have been obtained.

At Ahlawat & Associates, we have a proven approach to conducting secretarial audits that ensures compliance and mitigates risks for businesses in India. Our experienced team of professionals follows a systematic process to deliver comprehensive and reliable secretarial audit services.

1. Understanding your Business: We begin by gaining a deep understanding of your business operations, organizational structure, and legal requirements. This helps us tailor our secretarial audit process to meet your specific needs.
2. Assessing Compliance: Our team conducts a thorough review of your company’s compliance with relevant laws, regulations, and guidelines. We examine various legal and regulatory aspects, including corporate governance practices, statutory filings, board meetings, shareholding patterns, and more.
3. Identifying Gaps and Risks: Based on our assessment, we identify any gaps or areas of non-compliance in your company’s secretarial practices. We also identify potential risks and suggest appropriate measures to address them effectively.
4. Recommendations and Remedial Measures: We provide detailed recommendations to rectify the identified gaps and improve your company’s secretarial compliance. Our team assists in implementing the recommended remedial measures, ensuring a smooth transition towards compliance.
5. Documentation and Reporting: We maintain comprehensive documentation throughout the secretarial audit process. Our team prepares detailed reports that highlight the audit findings, recommendations, and actions taken. These reports serve as valuable references for future compliance efforts.
6. Ongoing Compliance Support: At Ahlawat & Associates, we believe in establishing long-term relationships with our clients. We offer ongoing support to help you maintain continuous compliance with secretarial requirements. Our team stays updated with the latest legal developments, ensuring your business remains aligned with regulatory changes.

The following are the Frequently Asked Questions of Secretarial Audit:

1. What is a secretarial audit?

Secretarial audit is a process that ensures compliance with various statutory and regulatory requirements under the Companies Act, 2013. It examines the company’s secretarial and legal practices, ensuring that they align with applicable laws and regulations.

2. Why is secretarial audit important?

Secretarial audit is important for several reasons. It helps businesses identify and rectify any non-compliance issues, ensuring adherence to legal requirements. It enhances corporate governance, mitigates legal risks, and boosts stakeholder confidence. Secretarial audit also assists in identifying areas of improvement in the company’s processes and procedures.

3. When is secretarial audit required in India?

As per the Companies Act, 2013, certain classes of companies are required to conduct a secretarial audit. These include listed companies, public companies with a paid-up share capital of ₹50 crore or more, and companies with an annual turnover of ₹250 crore or more. It is advisable for all companies to consider conducting a secretarial audit to ensure compliance and good corporate governance practices.

4. What does a secretarial audit cover?

A secretarial audit covers various aspects, including compliance with applicable laws, rules, and regulations, maintenance of statutory registers and records, filing of necessary forms and returns with regulatory authorities, board and general meetings compliance, related party transactions, contracts and agreements, and more. It aims to provide an independent assessment of the company’s compliance framework.

5. Who can conduct a secretarial audit in India?

A secretarial audit can only be conducted by a qualified company secretary who is a member of the Institute of Company Secretaries of India (ICSI). They possess the necessary knowledge, expertise, and experience to conduct a comprehensive and accurate audit.

6. How can I request a secretarial audit service?

If you require secretarial audit services in India, you can reach out to our expert team at Ahlawat & Associates. We have experienced professionals who specialize in secretarial audits and can assist you in ensuring compliance with applicable laws and regulations.