Compliance manual process in the company registration

Compliance manual process:

Compliance manual process in the company registration is one of the vital processes. Consequently it requires the complete study of the company and the current status of the company. In ordinary parlance compliance and audit is the term denotes the official examination and verification of changes and modification occurring in the existing company. Whether it is a financial record or the record of the new changes in the company properly maintain and submitting it to the registrar of companies.

Legal audit may be said to be an examination of the records and documents containing information and details relating to legal matters or transaction concerning the enterprise and its affair with applicable laws. Company secretarial services are the essential process in the manual compliance process. Regulatory agency and organizations are legally allows for the undertaking of the compliance company secretarial works under the professionals.

Compliance manual process in the company registration

Importance of secretarial audit:

Secretarial audit is commonly known as corporate law compliance and compliance review. It is the process of verification of the records and documents by the practising company secretary to check and certify by a company compliance with the provisions of companies Act. Company secretarial services are promptly complying with the requirements under those laws. Multiplicity and complexity of laws has necessitated having an effective legal compliance system in every company. It facilitates to ensure compliance and avoid risk associated with non-compliance.

To protect the company environment in a healthy way, it should free from the offence of the customers, employees, revenue, directors and other officers of the company. Company incorporation can be a simple process the maintaining the name in good books maximum depending on the proper compliance of the annual reports regarding the modification of the company. More than that, to avoid unwarranted legal actions by the law enforcing agencies and other persons entangle with this legal process.

Compliance manual with the corporate law:

Secretarial audit is an effective tool for corporate law compliance and timely corrective action when non-compliance is discovered. The benefits of the company secretarial service manifold and its beneficiaries are many. They include the promoters, directors, lenders, employees, government and government agencies and the last but not least the public at large. The object of the secretarial audit report is to express an opinion based on the inspection of a company’s secretarial record. Report to the company management as to whether the company has complied with the laws comprising various statutes, rules, regulations, etc.

In India, company formation is governing under a complex web of laws, rules and regulations. The experience so far shows that enactment of various laws is not enough and the desired result cannot be achieved unless their implementation is geared up. In fact, lack of implementation of laws with no mechanism of audit to check. Large number of cases of mismanagement and misuse of public funds are relay with this the essential compliance process. The law enforcement agencies have not been able to tackle these problems and ensure effective law procedure.

Compliance manual process in the company registration

Who are the major beneficiaries of the secretarial audit?

Owners and management, legal compliance officers, perspective acquirer are the major people are getting beneficiaries from this legal secretary audit. To ensure the owner that those in-charge of the management of the company are conducting its affair in in accordance with requirements of laws and that the owners’ stake is not being exposed to undue risk. For the company registration with the formal audit it is essential one. It is the management duty to undertake the responsibility of compliance of law is performing their duties competently. The day to management of the company are not likely to be exposed to penal are other liability on account of non-compliance with law.

Company secretarial services are the pro-active measure for compliance with a plethora of laws secretarial audit will have a salutary effect of substantially lessening the burden of the law-enforcement authorities. Through the secretarial audit can assist bodies like SEBI, stock exchanges, financial institutions, banks, etc., to gauge or measure the levels of compliance and non-compliance by the companies with whom they are concerned.

Statutory frame work bigger companies:

The Companies Act, 2013 the act has introduced company secretarial audit for bigger companies. This is an important milestone in the history of India’s company law and compliance management. It is also going to be a landmark in the history of the profession of company secretaries. Object behind this provision was explained in the notes on clauses appended to the companies’ bill, 2011.Section 204 coming into the force from1st April, 2014. Accordingly its provisions will apply to the companies falling within ambit in respect of the financial year commencing after 1st April. The listing companies are required to annex a secretarial audit.

Although, secretarial audit report to be attached to the board’s report. It does not specify the scope of the secretarial audit and contents of the report. There is nothing in the statute in exercise of the powers relating to the company incorporation. This is indeed a novel way of enacting a law and making it mandatory that makes it validity questionable. Consist of the provision relating to financial auditor, regarding appointment, removal, duties and powers of the secretarial auditor. Specimen of the agenda item and board resolution for the appointment of secretarial auditor is separately set out.

Compliance and manual of Secretarial audit report:

Every public company registration is having a paid up share capital of fifty crore rupees or more. Every public company is having a turnover of two hundred fifty crore rupees or more. The format of the secretarial audit report shall be in form no MR.3. Before commencing the process of secretarial audit by verification of the records and documents, it is desirable and useful on the part of the secretarial auditor to elicit from the concerned company some basic information and details in order that the secretarial auditor gets a snapshot of the actions and events that took place during the audit period. And know in advance as to what more information and detail the secretarial audit would need to be obtained from the company.

Compliance and manual with usefulness:

Secretarial audit of the company incorporation process should conducting by the practising company secretary on the same lines as financial audit this process must overlook by the Chartered Accountant. An independent professional, to ensure that the company finished their filing with the legal and procedural requirements. It is essentially a mechanism to monitor compliance with the requirements of stating law. Secretarial audit is wider in scope than compliance certification. It can be a likened to an abridged prospectus but not a full-fledged prospectus.

Company secretarial service is the duty based on the inspection of organisation’s account. It is the report to the organisation’s owners as to whether the company’s account give a true and fair review of its profit and or loss for the period of the report and of its state of affairs at the end of the period. This certification of accounts is prepared in accordance with the requirements of law the object of the secretarial auditor’s report is to form an opinion based on this inspection.

Compliance and manual duties of secretarial auditor:

Powers and duties of auditors and its sub section (14) provide the provision and it is mentioning that the financial audit is not identical with the secretarial audit. Every company formation has this wrong notion. Any qualification, reservation and adverse mark is relating to the maintenance of accounts and other matters connecting with it. Whether, the company has adequate internal financial control system there are two provisions in the act concerning secretarial standards. But only one of them makes it mandatory for the   companies to comply with the applicable secretarial standards. The secretary shall appoint every year two persons either from the directors or from the members of the board.

The high court also stated that the mere certificate from the managing agents that they had cash with them could not absolve an auditor from his duty to make the verification which only consisted in accepting the report of the managing agents is against the accepted audit practice and principle. These are the essential company secretarial service forcible in corners of company registration process.


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