All You Need To Know About Secretarial Compliance Software

Secretarial Compliance Software Nowadays, with the growing size of companies and the massive development of legislation related to them, it

All You Need To Know About Secretarial Compliance Software

Secretarial Compliance Software

Nowadays, with the growing size of companies and the massive development of legislation related to them, it is important to keep track of compliance with laws by the Companies. While we have framed enough laws, there arises a need for their proper implementation. This need has risen seeing the emergence of malpractices and frauds. To prevent them, the provision of Secretarial Audit has been recently introduced through The Companies Act, 2013 under Section 204. Thus it is important to use secretarial compliance software for managing your compliance and secreterial audits.

What Is a Secretarial Audit?

“Secretarial Audit is a process to check compliance with the provisions of various laws and rules/ regulations/procedures, maintenance of books, records, etc., by an independent professional to ensure that the company has complied with the legal and procedural requirements and also followed the due process. It is essentially a mechanism to monitor compliance with the requirements of stated laws” by ICSI.

So, in simple words, as a Financial Audit examines accounts and reports discrepancies in them, similarly, a Secretariat Audit examines whether all Company related laws are complied with or not by a company, and reports quarterly/ half-yearly or annually for any non-compliance. check out the demo of Fully Automatic TDS Return Filing. 

A Company Secretary in Practice has been assigned the role of Secretarial Auditor in section 2(2)(c)(v) of The Company Secretaries Act 1980, which is the only statute in the country, carving out ‘Secretarial Audit’ as an area of practice.

The Major laws looked into by a Secretarial Auditor/ Company Secretary are:

  • The  Companies  Act,  2013
  • The Securities Contracts (Regulation) Act, 1956
  • The Depositories Act, 1996
  • Foreign  Exchange  Management Act,  1999
  • Securities and Exchange Board of India Act, 1992

You May also be interested in Reading: Features of CLM Software

Which Companies Mandatorialy Require Secretarial Audit?

Under the new Companies Act, the following companies are required to attach a Secretarial Audit Report with their Board Report:

  1. Listed Companies,
  2. Every public company having a paid-up share capital of fifty crore rupees or more; or
  3. Every public company has a turnover of two hundred fifty crore rupees or more.
  4. Private Companies, which are subsidiaries of Public Companies.

The Secretarial Audit Report is prepared by the Company Secretary (CS). All details/reports required by the CS are necessary to be provided to him by the Company. After the Report is prepared, the CS passes on the report to the Board of Directors who are then responsible for annexing it to the Board Report and submitting all remarks made by the auditor.

  • Penalty

For any contravention of Section 204 of the Companies Act, 2013 there will be a penalty which shall not be less than Rs. 1 lakh and can exceed Rs. 5 Lakhs. This penalty may be imposed on the Company or the officer concerned or the Company Secretary, whosoever is in default. Other penalties for Fraud and misrepresentation also exist.

Importance Of Secretarial Audit

Secretarial Audit’s importance arises for both, the Company as well as the Shareholders. Here’s why:

  • Reduces Risk

Whenever a law or regulation goes unnoticed by a Company, they have to suffer the risk of facing action by any Government body. Thus, if a Secretarial Audit is conducted regularly, it ensures that there is no leakage of any type when it comes to compliance with law by companies.

  • Avoid Cost Of NON-COMPLIANCE

With every law breached, there is a penalty payable. Thus, to avoid the cost of fines, penalties,s or even the risk of imprisonment, ensuring proper compliance with the law is a way better alternative.

  • Corporate Image Of the Company

Companies that imbibe business and personal ethics and an effective compliance management program within their work culture often enjoy employee and customer loyalty and public respect for their brand. This helps build a good image for the company which can translate into better market capitalization and shareholder returns.

  • Earn Investors Trust

When a Company’s Secretarial Audit report is clear and good, an investor willingly trusts and puts its stake in such a company.  The risk of malpractice and fraud always tends to drive away prospective investors.

You May also be interested in Reading: Features of Legal Software

For shareholders, it produces an amount of confidence in the company and helps them decide which will be the safest and best company to invest in. As a basic principle, Secretarial Audit promotes Good Governance and compliance with laws.

At volody.com, we provide you with the service of Secretarial Auditing with fully automated secretarial software and have the compliance software to ensure that 75% cost of your Compliance is done automatically to ensure you live with Zero Non-Compliance with secretarial compliance software

  

 

Want more content like this? Sign up for our monthly newsletter.

You have been successfully Subscribed! Ops! Something went wrong, please try again.

You might also like: