Secretarial Audit: A need of hour: Harshal Arun Lahamge
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Secretarial Audit is a process of examining the compliance status of a company with various laws and regulations applicable to it. It is a comprehensive review of a company’s statutory records and documents, including minutes books, registers, and other documents, to ensure compliance with applicable laws and regulations.
Under the Companies Act 2013, every listed company and certain other classes of companies are required to conduct a secretarial audit annually. The purpose of the secretarial audit is to ensure that the company is complying with all the applicable laws, regulations, and guidelines, and that its operations are conducted in a transparent and ethical manner.
The secretarial audit is conducted by a qualified company secretary in practice (CSP), who is appointed by the company’s board of directors. The CSP is required to provide a report to the board of directors, which includes an assessment of the company’s compliance with various laws, regulations, and guidelines.
The secretarial audit covers various aspects of the company’s operations, including its governance structure, board meetings, general meetings, share capital, loans, investments, related party transactions, and other matters. The CSP also examines the company’s compliance with the provisions of the Companies Act, SEBI regulations, and other applicable laws.
One of the main benefits of conducting a secretarial audit is that it helps to ensure that the company’s operations are conducted in a transparent and ethical manner. This can help to enhance the company’s reputation and credibility with investors, customers, and other stakeholders.
The secretarial audit can also help to identify areas where the company may be falling short in terms of compliance. This can help the company to take corrective action and avoid potential penalties or regulatory action in the future.
In conclusion, secretarial audit is a critical aspect of compliance for companies in India. It helps to ensure that the company is complying with all applicable laws, regulations, and guidelines, and that its operations are conducted in a transparent and ethical manner. The secretarial audit is conducted by a qualified CSP and covers various aspects of the company’s operations. By conducting a secretarial audit, companies can enhance their reputation and credibility, identify potential areas of risk, and take corrective action to avoid potential penalties or regulatory action.