{"id":1019,"date":"2026-03-31T00:00:00","date_gmt":"2026-03-31T00:00:00","guid":{"rendered":"https:\/\/rize.blog.razorpay.in\/secretarial-audit-applicability\/"},"modified":"2026-06-24T12:01:50","modified_gmt":"2026-06-24T12:01:50","slug":"secretarial-audit-applicability","status":"publish","type":"post","link":"https:\/\/razorpay.com\/rize\/blogs\/secretarial-audit-applicability\/","title":{"rendered":"Secretarial Audit: Applicability, Scope, and Process"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">In this blog, we&#8217;ll explain a Secretarial Audit, its applicability, scope, and process, along with key benefits and penalties for non-compliance.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a Secretarial Audit?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A Secretarial Audit is an independent verification of a company&#8217;s compliance with corporate laws, rules, and regulations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It helps companies to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Detect instances of non-compliance early.<\/li>\n\n\n\n<li>Promote good governance and transparency.<\/li>\n\n\n\n<li>Ensure that legal and procedural requirements are consistently met.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The audit is conducted by an independent professional, usually a Company Secretary (CS) holding a valid Certificate of Practice issued by the Institute of Company Secretaries of India (ICSI).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Secretarial Audit Applicability<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Under the Companies Act, 2013, certain classes of companies are required to undergo a Secretarial Audit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is mandatory for:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>All Listed Companies.<\/li>\n\n\n\n<li>All <a href=\"https:\/\/razorpay.com\/rize\/company-registration\/public-limited\">Public Companies<\/a> with:\n<ul class=\"wp-block-list\">\n<li>Paid-up Share Capital of \u20b950 crore or more, or<\/li>\n\n\n\n<li>Turnover of \u20b9250 crore or more.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>All types of companies (including Private Companies) having outstanding borrowings of \u20b9100 crore or more from banks or financial institutions.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>Start your <\/em><\/strong><a href=\"https:\/\/razorpay.com\/rize\/company-registration\/private-limited\"><strong><em>private limited company registration<\/em><\/strong><\/a><strong><em> with compliance and documentation support with Razorpay Rize.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Secretarial Audit Report<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Secretarial Audit Report is prepared in Form MR-3 and includes a cover, scope and methodology, a compliance-status table, observations and qualifications, recommendations, and the auditor&#8217;s declaration.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">MR-3 is placed before the Board after completion of the audit and attached to the Board&#8217;s Report and Annual Report within the statutory timelines. Common annexures include the engagement letter, list of documents examined, and reports relied upon.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sample observations typically state: &#8220;We noted delays in statutory filings for the year and recommend corrective controls.&#8221; Qualifications are phrased as: &#8220;In our opinion, the company has not complied with [specific provision].&#8221;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Certifies whether the company is in compliance with applicable laws.<\/li>\n\n\n\n<li>Identifies governance risks and gaps.<\/li>\n\n\n\n<li>Highlights areas of non-compliance and recommends corrective actions.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">As per Section 204 of the Companies Act, 2013, the audit can only be conducted and the report issued by a:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Practising Company Secretary (PCS).<\/li>\n\n\n\n<li>Holding a valid Certificate of Practice from ICSI.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Scope of Secretarial Audit<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The scope of a Secretarial Audit is broad and spans multiple laws, including but not limited to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Companies Act, 2013<\/li>\n\n\n\n<li>Securities Laws, including:\n<ul class=\"wp-block-list\">\n<li>Securities Contracts (Regulation) Act, 1956 (SCRA)<\/li>\n\n\n\n<li>Depositories Act, 1996<\/li>\n\n\n\n<li>SEBI (LODR) Regulations<\/li>\n\n\n\n<li>SEBI Takeover Code<\/li>\n\n\n\n<li>SEBI Insider Trading Regulations<\/li>\n\n\n\n<li>SEBI Listing Agreement<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Foreign Exchange Management Act (FEMA)<\/li>\n\n\n\n<li>Labour Codes (effective November 2025)<\/li>\n\n\n\n<li>Environmental Laws<\/li>\n\n\n\n<li>Industry-specific Regulations<\/li>\n\n\n\n<li>Secretarial Standards issued by ICSI<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Additionally, the Secretarial Auditor also:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reviews the company&#8217;s systems and processes for compliance.<\/li>\n\n\n\n<li>Examines the Board structure and its functioning.<\/li>\n\n\n\n<li>May rely on reports from other professionals (auditors, legal counsel) for certain compliance areas.<\/li>\n<\/ul>\n\n\n\n<div data-rt-embed-type=\"true\">\n<style type=\"text\/css\">\n.cta-popup {<br \/>\n  border: 1px solid #111827;<br \/>\n  background-color: #0D1835;<br \/>\n  color: #FFFFFF;<br \/>\n  font-family: \"DM Sans\", Arial, sans-serif;<br \/>\n  font-size: 14px;<br \/>\n  padding: 20px 24px;<br \/>\n  width: 100%;<br \/>\n  border-radius: 12px;<br \/>\n  line-height: 1.6;<br \/>\n  box-shadow: 0 10px 30px rgba(0, 0, 0, 0.25);<br \/>\n  display: flex;<br \/>\n  align-items: center;<br \/>\n  justify-content: space-between;<br \/>\n  gap: 20px;<br \/>\n  box-sizing: border-box;<br \/>\n}<br \/>\n.cta-popup .headline {<br \/>\n  font-weight: 700;<br \/>\n  flex: 1;<br \/>\n  min-width: 0;<br \/>\n  word-break: break-word;<br \/>\n}<br \/>\n.cta-popup .cta-button {<br \/>\n  background-color: #305EFF;<br \/>\n  color: #FFFFFF;<br \/>\n  font-family: \"DM Sans\", Arial, sans-serif;<br \/>\n  font-weight: 700;<br \/>\n  padding: 12px 20px;<br \/>\n  border-radius: 8px;<br \/>\n  text-decoration: none;<br \/>\n  display: inline-block;<br \/>\n  max-width: 280px;<br \/>\n  white-space: normal;<br \/>\n  word-break: break-word;<br \/>\n  text-align: center;<br \/>\n  flex-shrink: 0;<br \/>\n  transition: transform 0.2s ease;<br \/>\n}<br \/>\n.cta-popup .cta-button:hover {<br \/>\n  transform: scale(1.03);<br \/>\n}<br \/>\n@media (max-width: 768px) {<br \/>\n  .cta-popup {<br \/>\n    flex-direction: column;<br \/>\n    align-items: flex-start;<br \/>\n  }<br \/>\n  .cta-popup .cta-button {<br \/>\n    width: 100%;<br \/>\n    max-width: 100%;<br \/>\n  }<br \/>\n}<br \/>\n<\/style>\n<div class=\"cta-popup\">\n<div class=\"headline\">\n    Thinking about company registration? Get your company registered online &#8211; fast, compliant, and stress-free.\n  <\/div>\n<p>  <a href=\"https:\/\/razorpay.com\/rize\/company-registration?utm_source=blog&amp;utm_medium=cta\" class=\"cta-button\"><br>\n    Get started with Razorpay Rize!<br>\n  <\/a>\n<\/p><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Eligibility Criteria for the Appointment of a Secretarial Auditor<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">To be appointed as a Secretarial Auditor, the individual must:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Be a qualified Company Secretary (CS) and a member of ICSI.<\/li>\n\n\n\n<li>Hold a valid Certificate of Practice (CoP) issued by ICSI.<\/li>\n\n\n\n<li>Have undergone relevant training in corporate governance and compliance.<\/li>\n\n\n\n<li>Maintain professional ethics and conduct in line with ICSI guidelines.<\/li>\n\n\n\n<li>Must not be disqualified under the Companies Act, 2013.<\/li>\n\n\n\n<li>For listed entities and their material unlisted subsidiaries, be a Peer Reviewed Company Secretary holding a valid peer-review certificate issued by ICSI.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Only a Practising Company Secretary (PCS) is authorised to conduct and issue a Secretarial Audit Report.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Process of Secretarial Audit<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The typical step-by-step process for conducting a Secretarial Audit is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Appointment of Secretarial Auditor: The company&#8217;s Board of Directors formally appoints a qualified Practising Company Secretary, issues a letter of appointment, and receives acceptance.<\/li>\n\n\n\n<li>Preparation of a Compliance Checklist: Based on applicable laws and regulatory frameworks.<\/li>\n\n\n\n<li>Compliance Verification: The auditor examines the company&#8217;s records, registers, filings, and processes.<\/li>\n\n\n\n<li>Management Interaction: Discusses preliminary findings and areas of concern with management.<\/li>\n\n\n\n<li>Recommendations and Corrective Actions: Advises management on how to address any gaps or non-compliance issues.<\/li>\n\n\n\n<li>Preparation of the Final Report (MR-3): The auditor formally documents observations and recommendations.<\/li>\n\n\n\n<li>Filing and Disclosure: The report is submitted to the Board and included in the Annual Report as required.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>Complete your <\/em><\/strong><a href=\"https:\/\/razorpay.com\/rize\/company-registration\"><strong><em>company incorporation<\/em><\/strong><\/a><strong><em> seamlessly with guided documentation support, only with Razorpay Rize.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the key features of a Secretarial Audit?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A Secretarial Audit is distinguished by several key features:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Independent Audit: Conducted by an external Practising Company Secretary.<\/li>\n\n\n\n<li>Comprehensive Scope: Primarily covers the Companies Act, 2013; Securities Contracts (Regulation) Act, 1956; Depositories Act, 1996; Foreign Exchange Management Act, 1999; and the SEBI Act and its regulations. For other statutory areas such as labour, environmental, and competition law, the audit reviews existing systems and may rely on other professionals for specialised assessments in financial and tax matters.<\/li>\n\n\n\n<li>Systematic &amp; Evidence-Based: Based on a thorough review of records and procedures.<\/li>\n\n\n\n<li>Board-Level Reporting: Findings and recommendations are directly reported to the Board of Directors.<\/li>\n\n\n\n<li>Governance-Focused: Designed to strengthen the company&#8217;s corporate governance practices.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Punishment for Default Secretarial Audit<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Non-compliance with Secretarial Audit provisions under the Companies Act, 2013, notably Section 204(4), carries penalties against the company, its officers in default, and the practising company secretary. More serious sanctions for false statements or fraud are covered under Sections 447 and 448 of the Act.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Section 204(4) of the Companies Act, 2013:<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The company, every officer in default, and the practising company secretary (if found guilty) are liable to a penalty of \u20b92 lakh under Section 204(4).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Section 448 (False Statements):<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 448 penalties are governed by Section 447 of the Companies Act, 2013.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Penalties for fraud under Section 447 can include imprisonment ranging from 6 months to 10 years.<\/li>\n\n\n\n<li>Fines may extend up to three times the amount involved in the fraud, with exact punishment depending on the fraud&#8217;s value and whether it involves public interest.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">The Company Secretaries Act, 1980:<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Disciplinary action against the Company Secretary may include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Suspension or cancellation of the Certificate of Practice.<\/li>\n\n\n\n<li>Monetary penalties.<\/li>\n\n\n\n<li>Professional misconduct proceedings.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Objectives of Secretarial Audit<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The key objectives of Secretarial Audit are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Ensure the company complies with legal and regulatory frameworks.<\/li>\n\n\n\n<li>Identify non-compliance issues before they become liabilities.<\/li>\n\n\n\n<li>Promote good corporate governance.<\/li>\n\n\n\n<li>Protect the interests of stakeholders- investors, employees, customers, and regulators.<\/li>\n\n\n\n<li>Help management take corrective actions proactively.<\/li>\n\n\n\n<li>Prevent penalties and legal actions for non-compliance.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Benefits of Secretarial Audit<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Conducting a Secretarial Audit offers several advantages:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Enhances the company&#8217;s compliance culture.<\/li>\n\n\n\n<li>Reduces legal risks and the likelihood of penalties.<\/li>\n\n\n\n<li>Supports better corporate governance and transparency.<\/li>\n\n\n\n<li>Increases stakeholder confidence- important for investors and regulators.<\/li>\n\n\n\n<li>Helps Directors and Management make more informed decisions.<\/li>\n\n\n\n<li>Facilitates continuous improvement in internal processes and systems.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>Get structured guidance with Razorpay Rize for smooth <\/em><\/strong><a href=\"https:\/\/razorpay.com\/rize\/company-registration\/public-limited\"><strong><em>public limited company registration<\/em><\/strong><\/a><strong><em> in India.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Learn about Secretarial Audit in India, its applicability, scope, and step-by-step process as per the Companies Act. Ensure your company stays compliant with legal and regulatory norms.<\/p>\n","protected":false},"author":1,"featured_media":1020,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1019","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/posts\/1019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/comments?post=1019"}],"version-history":[{"count":4,"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/posts\/1019\/revisions"}],"predecessor-version":[{"id":1601,"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/posts\/1019\/revisions\/1601"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/media\/1020"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/media?parent=1019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/categories?post=1019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/rize\/blogs\/wp-json\/wp\/v2\/tags?post=1019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}