Appointment and Responsibilities of a Company Secretary

The appointment of a Company Secretary plays a pivotal role in ensuring every company, especially a public company, private company, or listed company, complies with applicable Company Law provisions. Company Secretaries are essential to maintaining statutory registers, managing shareholder communications, and facilitating sound corporate governance practices.

Who Conducts the Secretarial Audit?

The Secretarial Audit, mandated under Section 204 of the Companies Act, 2013, must be conducted by a Practising Company Secretary (PCS)—a professional member of the Institute of Company Secretaries of India (ICSI) holding a valid Certificate of Practice (COP). Only such an independent professional is authorized to carry out the audit and issue the report in Form MR-3.

Eligibility Criteria for the Secretarial Auditor

To be eligible for the Appointment of Secretarial Auditor, the following conditions must be met:

• The auditor must be a member of ICSI
• Must hold a valid Certificate of Practice issued by ICSI
• Must not be disqualified under the Companies Act, 2013
• Must give written consent to act as the Secretarial Auditor
• A formal engagement letter outlining the Scope of Secretarial Audit, timeline, and deliverables must be issued
• The appointment is approved by the Board of Directors via a board resolution

Mandatory Appointment of Company Secretary

Under Company Law, the appointment of a full-time Company Secretary is mandatory for certain types of companies.

• Public companies having a paid-up share capital of ₹10 crore rupees or more
• All listed companies, where the Company Secretary is designated as Key Managerial Personnel (KMP)

Even private companies engaged in significant regulatory activities or with specific sectoral obligations are advised to appoint a qualified secretary for compliance purposes.

Duties and Responsibilities of the Secretarial Auditor

• Compliance Checks: Evaluate compliance with Company Law, SEBI Regulations, Foreign Exchange Management Act, Securities Contracts Act, and other applicable laws
• Governance Review: Examine the functioning of the Board of Directors, Executive Directors, and board committees
• Record Maintenance: Ensure accurate upkeep of statutory registers, minutes, resolutions, and disclosures
• Filing and Documentation: Verify timely filings with Registrar of Companies, SEBI, and other government authorities
• Reporting: Prepare the Secretarial Audit Report (Form MR-3), highlighting non-compliance, if any
• Confidentiality: Maintain confidentiality of internal records, sensitive data, and audit findings
• Recommendations: Provide guidance on improving governance processes, legal compliance, and internal systems
• Board Advisory: Offer insights to the board regarding gaps in compliance and recommend remedial actions

The company must provide full access to records, policies, agreements, and the management team to enable a comprehensive and accurate audit.