Secretarial Audit in India: Form MR-3 under Section 204
An independent review of your corporate and allied law compliance, with the MR-3 report ready to annex to the Board report.
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A secretarial audit is an independent check of whether a company has followed the Companies Act 2013 and the other laws that apply to it, carried out by a practising Company Secretary and reported in Form MR-3. Section 204 makes it mandatory for listed companies and for public companies that cross prescribed size limits, and many private companies and fundraising startups commission it voluntarily. The report is annexed to the Board report, so any qualification or observation becomes visible to shareholders and regulators. Our team plans the audit around your financial year, reviews records and filings against the law, and delivers a report your board can discuss and act on before it approves the annual report.
Who provides this service: our team of Company Secretaries and compliance specialists.
Who Needs Secretarial Audit (Form MR-3)?
- Listed companies, for which a secretarial audit is mandatory under Section 204
- Public companies that cross the prescribed paid-up capital or turnover limits
- Boards of unlisted public companies that want independent assurance on governance
- Private companies and startups preparing for a funding round, acquisition or investor due diligence
- Companies that have had a change in management or past filing lapses and want a structured health check
Key Benefits
- An independent view on whether board processes, filings and registers meet the Companies Act and the Secretarial Standards
- A report in the prescribed Form MR-3 format, ready to annex to the Board report
- Review that extends to FEMA, SEBI regulations where relevant and laws specific to your sector
- Findings explained in plain language, with corrective steps the board can track to closure
- Early warning on lapses such as late filings, missing disclosures or gaps in meeting records
- A documented governance review that investors, lenders and acquirers often ask to see during diligence
How It Works
Confirm applicability and scope
We check whether Section 204 applies to the company for the year, fix the audit period, identify the laws relevant to your business and agree a timetable that finishes before the board approves its report.
Collect records and registers
We request minutes of board, committee and general meetings, statutory registers, ROC filings, share records, approvals for loans, investments and related-party dealings, and the policies the company has adopted.
Test compliance against the law
Records are examined against Companies Act provisions, Secretarial Standards, FEMA reporting for foreign investment and borrowing, SEBI rules for listed entities and any sector law the management confirms applies.
Clarify observations with management
Preliminary observations go to management so missing documents can be produced or explained, and so the final report reflects facts rather than avoidable misunderstandings about how a record was maintained.
Issue the Form MR-3 report
The practising Company Secretary issues the report with the opinion, any qualifications or observations and the management representation, signed digitally and formatted for annexure to the Board report.
Support board discussion and follow-up
We walk the board or audit committee through the findings and help track corrective actions, such as pending filings or register updates, so that the next audit starts from a cleaner position.
Documents Required
- Certificate of incorporation, Memorandum and Articles of Association with all alterations
- Minutes of board, committee and general meetings, with attendance records and notices
- Statutory registers, including members, directors, charges, loans, investments and contracts
- Copies of ROC forms and challans filed during the audit period
- Share capital records covering allotments, transfers and share certificates
- Annual report, financial statements and the previous secretarial audit report
- Approvals and records for related-party transactions, loans, security and investments
- Records of foreign investment and overseas borrowing reporting, where applicable
- Stock exchange and SEBI disclosures and filings, for listed companies
- A list of laws applicable to the business as confirmed by management
Timeline and Fees
Indicative timeline: Commonly a few weeks, depending on company size, the volume of records and how quickly they are produced. The report must be ready before the Board approves its annual report; timing depends on your own records rather than a government authority.
Professional fee: The professional fee depends on the size and complexity of the company, the number of laws in scope, the audit period and how organised the records are. Contact our team for a written quote after a short scoping discussion.
What Can Go Wrong if This Is Missed or Done Incorrectly
- Not conducting a mandatory secretarial audit, or annexing a report that does not meet the requirement, exposes the company and officers in default to penalty under Section 204
- Unexplained qualifications in the report must be answered in the Board report and can draw attention from regulators, auditors and investors
- Lapses found late, such as missed filings, incomplete minutes or unreported foreign investment, are harder and costlier to regularise than those found early
- Listed companies face separate consequences under SEBI regulations for incorrect or missing secretarial reporting
Frequently Asked Questions
Which companies need a secretarial audit under Section 204?
Listed companies and public companies that cross the size limits prescribed in the managerial personnel rules, such as limits linked to paid-up capital or turnover, must obtain one. The limits are set by rule and can be revised, so confirm the current criteria with our team or on the MCA portal for your year.
Is a secretarial audit the same as a statutory audit?
No. A statutory audit is carried out by a Chartered Accountant on the financial statements, while a secretarial audit is carried out by a Company Secretary in practice on legal and procedural compliance, such as meetings, filings, registers and disclosures. A company that needs one often needs both.
Can a private company or startup choose a voluntary secretarial audit?
Yes. Boards often commission one before a funding round, an acquisition or a change in management, because it gives them a structured view of gaps in records and filings. The same MR-3 style report can be used, and the findings can be fixed before an investor raises them.
Who appoints the secretarial auditor?
The Board normally appoints a Company Secretary holding a certificate of practice for the purpose. Listed companies face additional conditions from SEBI on the appointment and tenure of the secretarial auditor, which change from time to time, so the current regulation should be checked before the appointment is made.
What happens if the report contains qualifications or adverse remarks?
The report stays annexed to the Board report, and the Board must explain each qualification, reservation or adverse remark in its own report. Findings should therefore be discussed and, where possible, corrected before the report is finalised, because shareholders and regulators can read them.
How long does a secretarial audit take and when should it start?
It depends on the size of the company, the number of laws involved and how quickly records are produced. Starting well before the financial year closes leaves time to resolve gaps, and the report must be ready before the Board approves its annual report.
Official Sources
Rules, forms and fees change. Check the current position on the official portal:
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Last reviewed: . Laws, fees and procedures change; check the official portal before you act.
Disclaimer: The information on this page is for general informational purposes only and does not constitute professional legal, tax or compliance advice. Requirements vary by situation. Please consult a qualified CA or CS for advice specific to your needs. Government fees and timelines are subject to change; verify with the relevant authority before proceeding.