Do You Need Secretarial Audit? A Practical Starting Point
Secretarial Audit is the one compliance report that looks beyond your balance sheet and asks a harder question: has the company actually followed the law — the Companies Act, SEBI regulations, FEMA, labour statutes, and every other applicable framework — not just accounted for it correctly? For listed companies, specified public companies, and large private companies, Form MR-3 is a mandatory annual filing, signed by a Practising Company Secretary, that becomes part of the Board's Report and is scrutinised by regulators, lenders, and investors alike. At PNPC Global, our secretarial audit engagements are led by qualified Company Secretaries working alongside our CA teams, giving you a single, coordinated review across corporate law, tax, and regulatory compliance rather than a fragmented, checkbox exercise.
What You're Really Buying
Secretarial Audit is an independent, periodic verification of a company's compliance with corporate laws and other applicable statutory and regulatory requirements, conducted under Section 204 of the Companies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. It must be conducted by a Practising Company Secretary (PCS) — a member of the Institute of Company Secretaries of India (ICSI) holding a valid Certificate of Practice — and the auditor issues a report in Form MR-3, which is annexed to the company's Board's Report under Section 134(3).
The scope of a secretarial audit is broader than a statutory financial audit.
For the full scope, current process and what PNPC includes, see the dedicated Secretarial Audit service page.
When You'd Need This
- Every listed company, regardless of size — secretarial audit and Form MR-3 are mandatory without any financial threshold
- Material unlisted subsidiaries of listed companies, as defined under SEBI LODR Regulations and the corresponding MCA framework
- Companies preparing for an IPO, private equity round, or strategic acquisition — a clean voluntary secretarial audit materially de-risks legal due diligence
- Companies that have received an MCA, SEBI, or Registrar notice regarding compliance lapses — a secretarial audit helps quantify and remediate the gap systematically
Before You Assume You Need This
- Small and medium private companies below the Rule 9 thresholds — annual secretarial compliance through a compliance retainer is typically sufficient, though a periodic voluntary review remains good governance practice
- One Person Companies (OPC) and small companies as defined under Section 2(85) of the Companies Act 2013 — Rule 9 secretarial audit applicability is not extended to this category by definition, and by their inherent size (paid-up capital and turnover well below the Rule 9 thresholds) they fall outside mandatory scope in the ordinary course
- LLPs — Section 204 applies to companies under the Companies Act 2013; LLPs are governed by the LLP Act 2008 and do not have an equivalent secretarial audit requirement, though large LLPs increasingly commission voluntary compliance reviews
Questions We're Actually Asked
What is a secretarial audit, in plain terms?
It is an independent check — conducted by a Practising Company Secretary — of whether your company has actually followed the corporate, securities, and other applicable laws during the year, not just recorded transactions correctly in its books. The result is a report in Form MR-3 that gets attached to your company's Board's Report and becomes part of the public MCA filing record.
Which companies are legally required to conduct a secretarial audit?
Material unlisted subsidiaries of listed companies are also brought within scope.
Is secretarial audit applicable to private limited companies?
Only if the private company independently crosses the Rule 9 thresholds — which is uncommon but not impossible for a large private company with significant borrowings or turnover, or where it becomes a material unlisted subsidiary of a listed parent. Most private limited companies are not within the mandatory scope, but many choose a voluntary secretarial audit as good governance practice — particularly before a large fundraise, IPO preparation, or strategic transaction.
Where PNPC Fits In
Speak with a PNPC Practising Company Secretary about whether secretarial audit applies to your company — and what a clean, well-documented MR-3 can do for your next fundraise, audit cycle, or regulatory review. Scope and fee confirmed in writing before any engagement begins.
PNPC Global has advised Chennai, Bangalore and Hyderabad businesses since 1986. Explore the full Corporate Law practice for related services, or go straight to the Secretarial Audit page for specifics.
This is a general explainer, not a substitute for checking today's rules with PNPC or the relevant authority — figures and deadlines move, so none are quoted here as fixed.