Company Secretarial Audit

The Secretarial Audit is the fragment of Legal Compliance reporting system. The Government of India analyzes the requirement for Secretarial Audit India only by rewarding it with the due Statutory recognition to such an audit. It’s the responsibility of the company to undertake Company Secretarial audit on its own.

This audit assures the board of directors about compliance of different provisions affecting corporate entities and, in this way, help justify their Bonafede of non-involvement in any commission or omission, any technical error, violation or contravention and breaches. This direct the directors to adopt measures for mitigating the consequences of the offences they hadn’t committed deliberately. The secretarial auditor performs as a catalyst in case of multiple corporate laws dealing with corporate functions and handles the situation well in case of alarming increment in the implications. In this way it supports the Board of Directors and Government of India.

According to section 383 A (1), any company which doesn’t require a full-time secretary and bears the paid-up capital up to 10 lakhs. The Compliance Certificate was made compulsory under the Companies (Amendment) Act, 2000, w.e.f. 13-12-2000, which inserted a provision in section 383A (1) of the Companies Act making it mandatory for every company not required to employ a whole-time secretary under sub-section. The certificate is a proof of the completion of the procedure complying with all the relevant provisions. The copy of the certificate is to be attached with the Board’ s report referred in section 217. The company secretary audits the documents before being submitted to board of directors for concluding the position of the company.

The content, scope and criteria of the company secretarial audit are framed by the Central Government of India and the rules and regulations are devised accordingly. According to 2000, Compliance Certificate Rules, the secretarial Audit is always conducted in interest of every corporate management as; an independent professional can approve that the company has walked by the compliances under the Act. It also serves as the thing of larger interest for the shareholders, creditors and employees. It assists in department of company affairs and registrar offices, the documents filed by the small and medium companies enveloped in this provision, assure proper compliance. This will even be helpful in reducing work of the inspection department. The inherent objectives of secretarial Audit are:

• Protection of apex management from uninvited hassles
• Compliance of Statutory requirements by the company
• The services cater exclusively to investors, lenders, shareholders for mitigating the scam levels.

Secretarial Audit Advantage: –

Below are the respective advantages of the Secretarial Audit:

• It is conducted for ensuring the owners that the management undertakings and other affairs of the company are conducted in accordance with the statutory requirements and the owner’s stake is in safe zone.
• Ensures the Management of a company that those who are charged with the duty and responsibility of compliance with the legislation requirements are performing their duties competently, effectively and efficiently, so that the personality in charge of the regular monitoring of the management of the company doesn’t get exposed to penalty or other liability in case of non-compliance with the laws.
• Assuring them of being thoroughly complied with the necessary regulations
• Repose faith in them that the company has complied with the laws and therefore they are free from any action by the enforcement agencies for non-compliance issues.
• The secretarial audit being pro-active measure for compliance with a plethora of laws, it will have a salutary effect of substantially reducing the burden of the law-enforcement authorities The secretarial audit provides assistance to bodies like SEBI, Stock Exchanges, Financial Institutions, Banks, etc. for measuring the parameters of compliance and non-compliance by the concerned companies
• The Secretarial audit can prove an effective strategy for the prospective acquirer of the company and for the joint venture partners interests.
• Comforting with hand on shoulder as an assurance for legal undertakings and the safe investment. SA will help unearth and check these practices and also enable law-enforcing agencies take well-timed corrective action by bringing to book the guilty. Secretarial audit provides comfort to the shareholder regarding the compliance and for ensuring them the safety of their investments.