Secretarial Audit Applicability 2026: Section 204 Guide | ASC Group

Corporate compliance is becoming increasingly important for businesses operating in India. Yet, many companies remain unsure whether they fall under secretarial audit applicability and what action is required when statutory thresholds are crossed. Missing a compliance requirement can result in penalties, reporting issues, and governance concerns.

The solution is to assess applicability early, identify compliance gaps, and obtain professional support before the annual reporting cycle. ASC Group helps businesses manage this process systematically through professional secretarial audit and compliance support.

What Problems Can Arise If Secretarial Audit Is Missed?

A company may face several challenges when mandatory requirements are overlooked:

  • Failure to obtain the required Secretarial Audit Report in Form MR-3.
  • Non-compliance with provisions of the Companies Act and applicable regulations.
  • Delays or qualifications in corporate reporting.
  • Monetary penalties for the company and officers in default.
  • Increased regulatory and governance risks.

Therefore, understanding secretarial audit applicability before finalising the Board’s Report is essential.

Who Is Covered Under Secretarial Audit Applicability in 2026?

Under Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, mandatory applicability broadly covers:

  • Every listed company.
  • Every public company having paid-up share capital of ₹50 crore or more.
  • Every public company having turnover of ₹250 crore or more.
  • Every company having outstanding loans or borrowings from banks or public financial institutions of ₹100 crore or more.

The relevant paid-up capital, turnover, or borrowing figures are considered with reference to the latest audited financial statements.

This means that a company should not assume that being privately held automatically removes the requirement. The ₹100 crore borrowing criterion can also bring a company within the audit framework.

What Is the Question Every Company Should Ask?

“Have we crossed any applicable threshold, and are our statutory records ready for an independent compliance review?”

The answer should be based on documented financial figures and an examination of corporate records—not assumptions.

A secretarial audit is conducted by a Company Secretary in Practice and provides an independent review of applicable legal and procedural compliance. The resulting report is prepared in Form MR-3 and annexed with the Board’s Report.

How Does Secretarial Compliance Solve the Problem?

Effective secretarial compliance should be continuous rather than limited to the annual audit. Companies should regularly monitor:

  • Board and shareholder meetings and resolutions.
  • Statutory registers and corporate records.
  • ROC and other regulatory filings.
  • Share capital and corporate actions.
  • Applicable securities and governance requirements.
  • Secretarial Standards and other relevant legal obligations.

This approach allows potential gaps to be identified and corrected before they become larger regulatory concerns.

How ASC Group Can Help

ASC Group provides professional corporate, secretarial, and regulatory services designed to help businesses strengthen their compliance framework. With its multidisciplinary advisory capabilities, ASC Group can assist with:

  • Assessing secretarial audit applicability.
  • Reviewing statutory records and corporate documentation.
  • Identifying compliance gaps and recommending corrective measures.
  • Supporting secretarial audit requirements and reporting.
  • Establishing a structured secretarial compliance mechanism.

With offices across major Indian business centres and more than three decades of professional experience, ASC Group positions itself as a comprehensive business advisory partner.

Conclusion

Secretarial compliance is not simply a year-end formality—it is an important component of responsible corporate governance. Companies should evaluate secretarial audit applicability well before the reporting deadline and address deficiencies proactively.

If your company meets any prescribed threshold, timely professional assistance can make the process more organised, transparent, and compliance-focused. ASC Group can help businesses assess their obligations, identify gaps, and build a stronger compliance framework for 2026 and beyond.

Location: India

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