Procedure For Appointment of Secretarial Auditor

Procedure-Appointment-of-Secretarial-Auditor

According to Sub-Section (1) of Section 204 of the Act, every listed company and a company belonging to other class of companies as may be prescribed shall annex with its Board’s report made in terms of sub-section (3) of section 134, a secretarial audit report, given by a company secretary in practice, in such form as may be prescribed.
Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 prescribes the other class of companies as under:
(a)     every public company having a paid-up share capital of rupees fifty crore  or more; or
(b)     every public company having a turnover of rupees two hundred fifty crore or more.
The format of Secretarial Audit Report shall be in Form MR.3. Thus private companies have been exempted from the provisions of the concept of secretarial audit. Secretarial Audit is extensively discussed in the paper ‘Secretarial Audit, Due Diligence and Compliance Management’’.
Procedure For Appointment of Secretarial Auditor
1.  Before appointment of Company Secretary in practice ensure that individual to be appointed, satisfies the definition of company secretary in practice under Section 2(25) of Companies Act, 2013 i.e. he is a member of the Institute of Company Secretaries of India and is not in full-time employment anywhere.
2.    Further ensure that individual proposed to be appointed, holds a certificate of practice from the Institute of Company Secretaries of India and that certificate is valid.
3.  Convene a Board meeting after giving notice to all the directors of the company in accordance with Section 173 of the Companies Act, 2013.
4.     Consider the proposal to appoint company secretary in practice for secretarial audit and pass Board resolution in the meeting, appointing company secretary in practice for secretarial audit.
5.   The resolution should mention the remuneration to be paid to such individual as company secretary in practice or authorize the Managing Director/any other director to fix the remuneration.
6.     The appointment shall be made up to the conclusion of the annual general meeting held after such appointment.
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