A secretarial audit is an independent check, by a practising company secretary, that a company follows the corporate and securities laws that apply to it. Listed companies and large public companies must get one under section 204 of the Companies Act, and listed entities and their material unlisted subsidiaries also fall under SEBI LODR. The report goes in Form MR-3 and is attached to the Board's report.
Last reviewed: 17 October 2026. Facts checked. We opened the section 204 and Rule 9 page on ca2013.com (marked valid as on 16 October 2026) and a TaxGuru guide dated April 2024, and ran a web search on SEBI LODR requirements. India Code returned a 403 error, so we did not read the statute directly. We did not open Regulation 24A, Regulation 15 or Form MR-3. The ₹50 crore paid-up capital and ₹250 crore turnover limbs were confirmed on the ca2013.com Rule 9 page (a secondary site). The penalty amount is left out because the two pages gave different figures. Peer-review and tenure rules for secretarial auditors were mentioned only on vendor pages and we could not confirm them.
It is different from MGT-8, which certifies only the annual return. See MGT-8 certificate. It is also different from a financial audit. See statutory audit explained.
Who needs it under the Companies Act
Section 204 asks listed companies, and companies in classes set by rule, to attach a secretarial audit report to the Board's report. The ca2013.com page says:
- A listed company means one with any securities listed on a recognised stock exchange.
- Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, adds public companies with paid-up share capital of ₹50 crore or more, or turnover of ₹250 crore or more.
- Both are measured as of the last date of the latest audited financial statements.
A borrowings test of ₹100 crore (outstanding loans or borrowings from banks or public financial institutions) also appears in search summaries of Rule 9, one of which says it covers any company, public or private. The measurement-date wording on the ca2013.com page also mentions loans or borrowings, but the page text we got did not show the limb itself, and the TaxGuru article printed the figure unclearly. Treat the borrowings test as likely but unconfirmed and read Rule 9 yourself. The secretarial audit applicability checker helps once you have the numbers.
Who needs it under SEBI LODR
TaxGuru says Regulation 24A applies to every listed entity and its unlisted material subsidiaries incorporated in India. A material subsidiary is one whose income or net worth exceeds 10 percent of the consolidated income or net worth of the listed entity and its subsidiaries in the preceding financial year. The same article, citing Regulation 15, says the exemption covers listed entities with paid-up equity capital up to ₹10 crore and net worth up to ₹25 crore, and entities listed on an SME exchange. We did not open Regulation 15, so confirm both figures.
Who conducts it
A company secretary in practice. The company has to give all assistance and facilities the auditor needs to examine the secretarial and related records.
What the report covers
TaxGuru lists the laws the auditor examines:
| Area | Examples from the article |
|---|---|
| Companies Act, 2013 | Meetings, filings, registers, appointments |
| Securities laws | Securities Contracts (Regulation) Act, Depositories Act |
| Foreign exchange | FEMA |
| SEBI Act and regulations | Takeover, insider trading, issue of capital, LODR, debt securities, buy-back |
| Other specific laws | Laws specifically applicable to the company's industry |
| Standards | ICSI Secretarial Standards and listing agreements |
The auditor reports in Form MR-3 and gives an opinion on compliance, with any qualifications or observations. The section says the Board's report must fully explain every qualification, observation or other remark. That makes the report public through the annual report.
How it differs from other reviews
| Review | Who | What |
|---|---|---|
| Statutory audit | Chartered accountant | Financial statements |
| Secretarial audit | Practising company secretary | Compliance with company and securities laws |
| MGT-8 | Practising company secretary | The annual return |
| Internal audit | Chosen by the Board | Controls and processes. See internal auditor appointment |
How to prepare
- Confirm whether the company falls under section 204, Regulation 24A or both.
- Appoint the practising company secretary, and check their eligibility.
- Build a compliance file: registers, minutes, ROC filings, disclosures to exchanges.
- Map the sector-specific laws that apply.
- Fix open gaps before the audit starts, not after.
- Review the draft MR-3 with the Board, and prepare the explanation for each remark.
- Attach the report to the Board's report.
The supporting records come from board meetings, AGMs and related party approvals.
Frequently Asked Questions
Is secretarial audit mandatory for all companies?
No. It applies to listed companies and to classes set by rule, such as large public companies.
Who can do a secretarial audit?
A company secretary in practice.
What is Form MR-3?
The format for the secretarial audit report. It is attached to the Board's report.
Do private companies need it?
The paid-up capital and turnover limbs we saw refer to public companies. A borrowings limb, if it applies as some summaries say, could reach private companies too, and TaxGuru adds that section 204 can apply to a private company that is a subsidiary of a public company in a prescribed class. Check Rule 9.
Does the Board have to respond to the report?
Yes. Section 204 asks directors to fully explain any qualification, observation or remark.
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