Section 204: Secretarial audit for bigger companies
Companies Act, 2013 · Chapter XIII: Appointment And Remuneration Of Managerial Personnel · In force
This section requires bigger companies to undergo a secretarial audit and include the audit report with their Board's report, with penalties for non-compliance.
Penalty
(4) If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, the company, every officer of the company or the company secretary in practice, who is in default, shall be 2[liable to a penalty of two lakh rupees].
The section, clause by clause
What the section says
In plain terms
(1)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.
Every listed company and certain other prescribed companies must include a secretarial audit report with their Board's report, which must be prepared by a practicing company secretary in a prescribed form.
(2)It shall be the duty of the company to give all assistance and facilities to the company secretary in practice, for auditing the secretarial and related records of the company.
Companies must provide assistance and facilities to the practicing company secretary to audit their secretarial and related records.
(3)The Board of Directors, in their report made in terms of sub-section (3) of section 134, shall explain in full any qualification or observation or other remarks made by the company secretary in practice in his report under sub-section (1).
The Board of Directors must fully explain any qualifications, observations, or remarks made by the practicing company secretary in their report.
(4)If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, the company, every officer of the company or the company secretary in practice, who is in default, shall be 2[liable to a penalty of two lakh rupees].
If a company or its officers or the practicing company secretary contravene this section, they will be liable to a penalty of two lakh rupees.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
1. Subs. by Act 22 of 2019, s. 30, for sub-section (5) (w.e.f. 2-11-2018).
2. Subs. by Act 29 of 2020, s. 41, for certain words (w.e.f. 21-12-2020).
Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.